Abolition of stamp duty would surge home sales by 50%

Property sales could rise by an extra 100,000 transactions per year in NSW if the government removes stamp duty, new analysis by the state Treasury forecasts.

Large stamp duty charges on real estate purchases prevents people from moving to more suitable homes and nearer to jobs, including older people who could potentially downsize and free up larger properties for growing families.

Dominic Perrottet says paying stamp duty every time a home is bought ties people down and limits mobility.

The average tenure in a modern job is around 3.3 years and a school leaver today could have 17 different employers in their lifetime, based on social research firm McCrindle Research.

NSW Treasurer Dominic Perrottet mentioned that analysis by his Treasury department suggested that if stamp duty was removed for long, the change would probably increase the annual volume of housing transactions by between 40% and 70%, with 50% increase being the most possible outcome.

Mr Perrottet is proposing to offer future home buyers the option to avoid a large upfront stamp duty and elect to pay an annual property tax based on the unimproved land value.

Source: Australian Financial Review and Bloomberg