The rental property market in Australia is in a very sluggish form. If it has to be revitalized then the active participation of the government is needed. The first step the government can do is to abolish the stamp duty. This is a long standing demand of the Real Estate Institute (REI) of New South Wales. The state government had said that it would abolish the stamp duty if it was compensated for the revenue loss. The stamp duty on residential homes was almost thirty one percent of the state income in the last financial year. Not many rental homes are available in the Northern Rivers. The availability rate is among the lowest in the country according to Tim McKibbin of the institute. The old scale of stamp duty does not keep up with the current prices. Over the years it has been seen that the prices of houses have grown dramatically. The government must do something about the extraordinary bracket creep in stamp duty that has resulted from a strong market ensnared in a 25-year-old tax scale.

These stamp duty and land tax are preventing investments in the housing sector. These high taxes are big deterrents in people wanting to buy a home for the very first time. People would go and invest in other cash term investments when these taxes become a hurdle. Other investments don’t have any these kinds of obstructions to enter the market. t is the citizens of the state, especially the first time home buyers that are suffering because of the stamp duties and land taxes. When the tax and stamp duty figure becomes very big the first time home buyers find it very difficult to buy a house for the first of their choice. This in turn puts pressure on the rental market. reasurer Michael Costa has said that they would try to bring in reforms in the housing sector. These words of the Treasurer were welcomed by the Property Council of Australia. He has said that his government would support the abolition of the stamp duty as it would be a part of the Federal ‘root and branch’ reform review.

SW Executive Director Ken Morrison was of the opinion that as this stamp duty was one of the first taxes in the country, it is a positive step by government to support it. The Henry Tax Review showed that due to the stamp duty the house owners are stuck to their current property and this acts as a handbrake on economic activity. Abolition would mean that the revenue coming to the government would come down by a big margin. There has a mean to compensate the government of the huge loss. Abolishing the tax would stimulate activity which in turn would boost the Commonwealth Government’s tax take. he COAG need to concur on an implementation plan to make sure that this detrimental tax is phased out.