Housing supply could be improved by assisting retirees and upgraders who are being impeded from selling their properties due to the cost of stamp duty, according to the Real Estate Institute of NSW.
Following on from NSW premier Gladys Berejiklian’s comments that she is open to tax changes to improve supply and housing affordability, REINSW president John Cunningham has emphasised that supply is “not just about new homes”.
Instead, he says that the key to housing supply is unlocking existing properties held by retirees and upgraders.
“Buyers are now forking out over 4 per cent of the value of a property on stamp duty and this is stopping the supply of established homes flowing into the market,” Mr Cunningham said.
“This problem has been caused by successive governments who failed to address stamp duty bracket for over 30 years.”
Providing stamp duty incentives to older Australians to downsize will see more properties coming onto the market, according to Mr Cunningham.
“There would be a chain reaction. One transaction can set off a chain reaction that leads to 10 sales. If we get the supply of existing properties flowing, then the price pressure will be eased,” he said.
To effect this change, Mr Cunningham called on the NSW government to provide retirees with a 50 per cent reduction in stamp duty for a residential property purchased to replace an existing residential property, up to the value of $1 million.
“In combination with this strategy there needs to be genuine and compelling incentives for all buyers, including retiree