Real estate
New houses are under construction in a new subdivision in Golden, Colorado August 28, 2014. The National Association of Realtors said its Pending Home Sales Index, which leads home resales by a month or two, increased 3.3 percent in July to its highest level in 11 months. Reuters/Rick Wilking

The Australian government has been urged by a leading real estate developer to scrap stamp duty to help first home buyers enter the market. The demand was made by AV Jennings Chief Executive Peter Summers who joins the heated housing affordability debate about eliminating the tax on property transfers, which was supposed to be scrapped when the Goods and services Tax was introduced a decade ago.

“We believe that a sensible discussion around a number of points is critical. The issue of stamp duty, a tax that was meant to be eliminated in 2000 with the introduction of GST, is one such debate long overdue,” Summers said.

The developer said his company has been raising the demand for abolition of Stamp duty for many years. Noting that the impact of government charges and taxes are hampering housing affordability, Summers said housing debate in Australia needs to be more comprehensive, covering issues beyond the price rise in Sydney. Otherwise, it will miss out on what is happening across the country, reports Sky News.

Stamp duty an inefficient tax

Summers’ call to eliminate stamp duty in Australia is not the first time the tax has come under fire. In fact, a tax discussion paper by the federal government in March had dubbed stamp duty as Australia's most inefficient tax, while many economists and academics have also critised it, calling it a barrier to investment and economic growth.

Despite the stakeholders’ resistance to stamp duty, it is a cash cow for state governments. A major chunk of the record $2.5 billion surplus of the NSW government in the current financial year will come from stamp duty revenue, notes the Sky News report.

Sydney commercial property demand booming

Meanwhile, big money is flowing into Sydney’s commercial property market. According to investment advisers and fund managers, Sydney’s offices and malls are only going to get bigger, reports The Australian Financial Review.

A market research report says Sydney has the unique distinction of being Australia's biggest city in commercial real estate investment and the world’s 10th most-traded market. Sydney has attracted US$8.2 billion (AU$11.2 billion) of real estate investment in the year until June 2015, showing an increase of 16 percent over the previous 12 months, according to global real estate services group DTZ.

In the Asia Pacific, Sydney’s commercial property is the second-most-traded real estate market behind Tokyo. It is drawing more commercial investment than Hong Kong and Singapore.

“The results confirm the importance of Sydney as a major investment destination, not only in Asia Pacific but also globally,” said James Patterson, CEO, DTZ for Australia and NZ.

When Asia Pacific cities as a whole faced a dip in the volume of transactions in 2015, only Sydney was unaffected. The January deal of Dalian Wanda's acquisition of Gold Fields House near Circular Quay for AU$415 million is one example of Sydney’s soaring popularity, the report said.

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