Making the switch from stamp duty to land tax would not only lower the cost of housing and reduce rents, but could also boost Gross State Product by more than 1 per cent and create up to 10,000 jobs, according to a new report from the NSW Council of Social Service (NCOSS) and the NSW Business Chamber.
Prepared by KPMG for the NSW Business Chamber and NCOSS, the report, Taking on Tax: Reforming NSW Property Taxes, demonstrates the benefits to the NSW economy of abolishing stamp duty on property transfers and gradually introducing a broad-based land tax.
NCOSS CEO Tracy Howe said the new modelling shows that this reform would create new jobs, boost economic growth, and most importantly, improve housing affordability.
“Our state and federal tax systems are a real and significant factor in the housing affordability crisis in NSW.”
Ms Howe said while improving housing affordability in NSW would require a number of strategies, switching from stamp duty to land tax would make a significant difference.
“It would remove the disincentive for people to buy and sell property, making it easier for households to move as their needs change over time, enabling better use of the existing housing stock and reducing the upfront costs of home ownership.
“It would also place downward pressure on rents over time as investors seek less return on their investment to cover their costs.
“At a time when housing affordability is reaching crisis levels the NSW Government should be looking seriously at this proposal.”
Ms Howe said she was proud to be part of an innovative partnership between business and civil society to come up with solutions to some of the state’s toughest problems.
“This report shows the switch to land tax has widespread support and that support is growing.
“While it would be a big change for NSW - and there must to be more work down on how the switch would be best implemented - this report makes it clear it’s a change NSW needs.”