NSW Treasurer Dominic Perrottet to announce big changes to stamp duty on buying property
NSW will be the first Australian state to index stamp duty brackets to the consumer price index — a move that would save about $500 on the average property transaction within years.
NSW
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NSW will be the first Australian state to index stamp duty brackets to the consumer price index — a move that would save about $500 on the average property transaction within years.
It’s understood the biggest shake-up of stamp duty in three decades is being driven solely by Treasurer Dominic Perrottet’s office. He will announce this morning the $500 savings will grow further from about 2021. However, the Opposition last night said it was “too little, too late”. “We’ve had a booming property market for five years, only in the last few months starting to cool, this will be way too late,” shadow treasurer Ryan Park said.
Under the overhaul, the seven price bands that determine how much stamp duty is paid by home buyers will be adjusted for inflation. The scheme will start in mid-2019, Mr Perrottet is expected to tell media today.
Stamp duty has been unchanged in NSW for 32 years, despite the median house price rising by an estimated 1000 per cent in the interim.
When the existing transfer duty rates were set in 1986 the median Sydney dwelling price, according to research by property group CoreLogic, was just $80,000 compared with the current median house price of just above $1 million.
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In the 2017-18 financial year, NSW residential and commercial property buyers paid a total $9.8 billion in stamp duty after a record 228,000 sales, with stamp duty accounting for 28 per cent of all state tax revenue.
But the government predicted in this year’s budget it would reap $5.6 billion this financial year.
A typical Sydney buyer pays $42,000 duty when purchasing a home. Much of the tax burden is borne by younger buyers new to the expensive market.
First-home-buyers don’t pay the duty on properties under $650,000, and a reduced rate on homes costing $650,000 to $800,000.
In August the government said that 35,000 people had saved up to $34,360 each on buying their first home through their housing affordability measures.
Mr Park argued that the $500 savings would do little for Sydneysiders trying to enter the market despite its recent downturn.
“Average stamp duty is just under $40,000 so this is hardly going to make a big difference,” he said.
The Property Council of Australia has pushed for stamp duty to be greatly reduced and brackets indexed to reflect the current market.