NSW has announced its proposal for optional stamp duty, replacement with annual land tax and changes to first home buyer support. This is open for discussion with plans in motion for the second half of 2021. The plans include:
- Choice between a stamp duty OR annual property tax.
- If property tax is chosen, that property would forever be subject to the tax.
- The ‘wealthy’ to be excluded with the top 20% required to pay stamp duty. Current median value in Sydney is $860,955 and regional NSW $483,683, the likely cut off will be around low to mid $1M price range. This is the most controversial and will receive blowback. If instituted, it will impact the market as buyers will set limits to not exceed this price.
- Eligible first home buyers receive a $25,000 grant to spend as they like, with hopes it’ll be spent in the broader economy rather than increasing property values as most grants do. This would replace the existing stamp duty concessions available.
Our initial impressions?
Bravo Treasurer Dominic Perrottet for having the courage to place creative tax reform on the table. Stamp duty has been on the agenda for some time, and if NSW, the most populous state with high property values pulls this off, it is almost certain all others will follow.