Retirees need to sell up
THE Real Estate Institute of New South Wales is calling for stamp duty reforms for retirees to help ease housing affordability.
The REINSW believes the key to increasing housing supply is unlocking property held by retirees and upgraders who are choosing to stay put due to the cost of stamp duty.
REINSW president John Cunningham said comments made by NSW Premier Gladys Berejiklian that she is open to tax changes to improve supply and housing affordability are a step in the right direction.
"Premier Berejiklian has stated that the key to housing affordability is supply. However, supply is not just about new homes. The key to housing supply is unlocking existing properties held by retirees," he said.
"Buyers are now forking out over 4% of the value of a property on stamp duty and this is stopping the supply of established homes flowing into the market. This problem has been caused by successive governments who failed to address stamp duty bracket creep for over 30 years."
Mr Cunningham believes that by providing stamp duty incentives to older Australians to downsize we will see many more properties coming onto the market.
"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."
Mr Cunningham said to set this scenario in motion, the state government should provide retirees with a 50% 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 retirees, to relocate to regional areas in order to ease the pressure on the Sydney market," Mr Cunningham said.