NSW considering to make stamp duty optional
- Posted By Pasang Sherpa
Homebuyers in the NSW are expected to save tens of thousands on their purchases as the state undertakes one of its greatest tax changes by eliminating stamp duty.
Treasurer Dominic Perrottet unveiled the reform as Australia's largest state grapple with a budget deficit of $16 billion.
Perrottet said stamp duty would now be optional, with buyers being given the option of either paying a high property tax in advance or a lower annual land tax on new property transactions. The government forecasts that over four years the change in policies would contribute $11 billion to the NSW economy.
In addition to the rate applied to the unimproved land value, the tax would be determined at a fixed rate. And as soon as the land becomes subject to a new levy, prospective owners will then pay the tax.
Owner-occupied houses would draw a lower tax rate than investment properties, but Perrottet claimed that protection against landowners would also result in higher taxes.
The Treasurer said that the old stamp duty system of the state required an upgrade, but the government would negotiate its new model with the community up until March. Perrottet noticed that although it took one year to save the stamp duty in1990, it currently takes an average of two and a half years.
“This is the reform we need to implement,” Perrottet said, adding that he hopes to have stamp duty overhauled quickly.
“When it comes to our economy and the biggest impediment on economic growth, the number one area for states are taxes,” Perrottet said.
“Particularly inefficient taxes that stifle economic growth, like payroll tax. But the worst which we’ve been speaking about for some time is stamp duty, it is an impediment to home ownership.”
Many who have previously purchased a home and have already paid stamp duty on the acquisition will not be affected by the proposed scheme.
SOURCE:
Dean, L., 2020. Yahoo Finance. [Online]
Available at: https://au.finance.yahoo.com/news/nsw-phases-out-stamp-duty-013720447.html