The NSW Treasurer’s announcement of changes to the State’s stamp duty system is a much-needed structural reform which, over time, will help reduce the tax burden on people buying a home in NSW.
“In 2018, stamp duty adds almost $50,000 to the purchase of the average property in Sydney and reducing what purchasers have to pay in tax will make buying a home that little bit easier,” Property Council NSW Executive Director Jane Fitzgerald said.
“Stamp duty is a handbrake on transaction activity and locks people into housing which is not appropriate for their needs.”
The NSW Government collects about $9 billion in stamp duty revenue. It is more than 30 years since the stamp duty brackets were last reviewed with the current rates being set in 1986.
“In 1986, stamp duty on a median home would have been approximately $1,931 or 1.96 per cent of the house price,” Ms Fitzgerald said.
“The highest bracket then, applying to homes over $300,000 was never intended to affect the average home purchaser, it was meant to only apply to ‘premium’ homes.
“Nowadays in Sydney it’s the exception rather than the rule that you avoid the top rate.
“That’s why stamp duty reform is an important piece of micro economic reform for NSW and Treasurer Perrottet is to be congratulated.
“The indexation of rates will give buyers modest savings initially but will, over time, ensure no repeat of the current situation where stamp duty is a barrier for first home buyers, up sizers and right sizers.
“Despite the cooling housing market, housing affordability remains a serious short and long-term issue for the State.
“Implementing structural changes to the stamp duty framework is a great long-term investment in providing more affordable housing for NSW.
“The Property Council urges the Treasurer to go further and adjust the rates themselves to realign average stamp duty payments with the purchase of the average home.”
Source: Property Council of Australia