Sydney housing crisis: Generational split on how to solve affordability dilemma

Sydney's worsening housing affordability crisis has split its residents along generational lines, a new poll confirms.

Ask whether the Baird Government should abolish stamp duty on residential property, in favour of a land tax on all homes, and 45 per cent of young respondents, aged 18 to 34 years, are supportive.

But asking the same question to an older generation meets equal resistance.

An exclusive Fairfax/ReachTEL poll shows 41.5 per cent of people aged 65 and over would oppose such a policy.

Cutting stamp duty would remove a major stumbling block to young home buyers, who are only offered tax relief on new homes, up to a cap of $750,000.

Home buyers are facing stamp duty bills of around $42,000 for a typical home costing $1 million.

But broadening land tax would impose a new annual fee potentially costing thousands of dollars to existing home owners, including retirees on diminished incomes.

The poll of 1624 residents across NSW found overall support or opposition to such a policy was almost evenly split, with 36.3 per cent supporting, 36.4 per cent opposing, with another third (27.3 per cent) undecided.

Such a large undecided vote shows the potential gain for a political party that can solve the biggest BBQ stopper of recent times.

But the generational split in the polling also shows why the Baird Government and NSW Opposition have tread warily on the issue.

When the federal and state treasurers met in Canberra on Friday to discuss housing affordability, stamp duty, as well as negative gearing, came up for debate again, but there was no resolution.

In October, Premier Mike Baird said his government wasn't considering replacing stamp duty with land tax, after 30-something Finance Minister Dominic Perrottet publicly floated the idea as a measure to address housing affordability.

The ACT government has said it will phase out stamp duty, and federal Treasurer Scott Morrison welcomed the idea when Mr Perrottet made his suggestion in October.

Amid the property boom, stamp duty has fuelled the NSW Budget, contributing $8.3 billion to NSW Treasury coffers last year. This compares to $3.8 billion for the 2011-12 financial year.

Although stamp duty revenues have eased in the past two months, stamp duty has already contributed $2.67 billion in the current financial year.

NSW Treasurer Gladys Berejiklian said any major tax reform must occur in the context of broader reform of federal-state financial relations.

"Housing affordability is an issue of major concern to the NSW Government," she said.

"We do believe that the main lever we can use to make a difference is increased supply ?but we also recognise that there are additional ways Governments can address this issue, especially when it comes to supporting new entrants to the housing market."

Planning minister Rob Stokes last month blamed negative gearing, a tax incentive controlled by the federal government, for worsening housing affordability and appeared to back federal Labor's call to abolish it. The Turnbull Government has ruled out any changes to negative gearing.

Shadow treasurer Ryan Park said: "Addressing housing affordability doesn't have a single approach solution. Any approach will need to be multipronged and include supply, incentives, taxation and many other measures.

"What the public need now is consistency and clarity from the Baird Government about what it plans to do; not Government Ministers shooting from the hip with off the cuff policy ideas in a bid to grab headlines."

He said NSW Labor would work with industry experts and academics early in the new year to form a policy.

The Fairfax/ReachTEL poll found that opposition to scrapping stamp duty in favour of land tax was the same among Liberal and National voters (37.8 per cent) and Labor voters (37.8 per cent).

But Labor voters (41.3 per cent) and Greens voters (52.3 per cent) were more likely to support the abolition of stamp duty, compared to Liberal and National voters (35.7 per cent).

December 3 2016 / SMH