NSW Premier Mike Baird says his government is not considering replacing stamp duty with a land tax despite the proposal being welcomed by the federal Treasurer.
Mr Baird told reporters on Wednesday that while he agreed stamp duty was an "inefficient tax", the NSW government was not considering scaling down stamp duty in exchange for a land tax.
The comments came in response to NSW Finance Minister Dominic Perrottet's assertion in The Australian that exchanging stamp duties for broad-based land taxes would encourage property transfers, relieving chronic pressures on the market.
"NSW has shown it is prepared, on every level, to consider all measures but ultimately, at the moment, that idea of taking away stamp duty and putting in a land tax - that's not a consideration," Mr Baird said.
"There is some suggestion that if you lower the stamp duty, people will just borrow more and the values of the houses would go up."
In an awkward turn of events, Treasurer Scott Morrison praised Mr Perrottet's suggestion just an hour after Mr Baird's comments.
"I welcome the fact that, in NSW, they're looking at issues which would rebalance their tax base, which ... would improve housing affordability," he said in Adelaide.
Mr Morrison went on to say this was the sort of discussion he was hoping for when he addressed the issue of housing affordability in a speech earlier this week.
However, both men made similar statements about supply being key to solving the affordability issue.
"As a simple principle, it's clear: housing affordability - more supply," Mr Baird said.
"We are leading the country in terms of housing approvals and that's the best way you can boost supply - build the infrastructure, clear the bottlenecks."
