Replacing stamp duty with a broad-based land tax in NSW could generate thousands of jobs, bring down rental prices and boost the economy by $5 billion, business and social welfare advocates have said.

Key points: Land tax could boost the gross state product by $5 billion, research finds

Land tax could boost the gross state product by $5 billion, research finds Advocates say 10,000 jobs could be created and rents would fall

Advocates say 10,000 jobs could be created and rents would fall NSW Treasurer says tax reform should benefit vast majority of people

However, the state's Treasurer has all but ruled out the proposal, saying it lacks community support.

The NSW Business Chamber and the NSW Council of Social Service (NCOSS) commissioned research by consultants KPMG, which found the move could create up to 10,000 jobs and boost the Gross State Product by $5 billion.

The jobs would be generated from increased mobility in the housing market, the business chamber said in a report based on the research.

"The sectors that benefit most from the abolition of [stamp duties] in NSW are Residential Dwellings, Rental, Hiring & Real Estate Services and Construction," it said.

Treasurer Glady Berejiklian said she was always happy to consider tax reform, but she was not convinced the proposal would benefit everyone.

"We don't believe the current proposal yet has the support of the community and we're a government that believes that tax reform has to be done holistically," Ms Berejiklian said.

"You need to look at what's happening in federal–state relations, you need to look at what's happening in the federal tax system."

Ms Berejiklian said the proposal meant that everyone would pay land tax on their home.

"When you're talking about tax reform, you have to consider options where the vast majority of people are better off," she said.

"When you're considering options which actually increase the overall revenue you have to ask yourself 'well, who ends up paying more?'"

ACT shows proposal can succeed: business chamber

Business chamber chief executive Stephen Cartwright had predicted the Government would be hesitant to back the proposal.

"There are two reasons for that; the first being during boom times they make a lot of money from stamp duty," he said.

"Secondly, there are transitional issues.

"For example, say there's a lady who's a pensioner. She may have bought her house 30 years ago, she doesn't have any income to pay the land tax, but she's sitting on quite an expensive piece of land."

Mr Cartwright said those issues could be dealt with if the changes were made gradually.

"The ACT Government has done it; they're in a 20-year transition from stamp duty to a broad-based land tax," he said.

"If you handle it slowly, carefully, make exemptions for certain categories of people then, by and large, you can handle the unintended consequences of making the change.

"The problem is if you just stick with the status quo you end up not doing anything, and that's one of the problems with our political system generally at the moment."

Baird has 'more positions than Kama Sutra' on tax

NCOSS chief executive Tracy Howe said the proposal would reduce rent, which would benefit low-income earners.

"As for older people who are in bigger homes and they want to downsize, this means they can start moving in the market more without worrying about that onerous stamp duty that's hanging over their heads," Ms Howe said.

In Sydney, a typical house purchase costs more than $1 million, which requires payment of more than $41,000 in stamp duty to the State Government.

Opposition Leader Luke Foley said Premier Mike Baird had talked a lot about tax reform but seemed unwilling to make changes to stamp duty because his budget had been benefiting from the property boom.

"Mr Baird has had more positions than the Kama Sutra when it comes to taxation," he said.

"I don't know what his current position is, but what I do know is our schools and our hospitals and the people of this state who rely on those health and education systems are missing out."