“By Paul Goldsmith of Highlands Funding”
https://www.highlandsfunding.com.au/
The NSW Government has released their latest update to the stamp duty reform proposal. As part of the update they articulate the key drivers of the reform as well as outlining proposed calculations.
Boosting Home Ownership
‘Since 1990, NSW average earnings have trebled, average house prices have increased around five times, and average stamp duty on dwellings has increased almost seven times. Almost inevitably, homeownership has declined, from around 70% in the 1990s to around 64% today.
Boosting First Home Ownership
‘In two decades, the share of first home buyers aged under 35 has declined from 69% to 55%’.
Enhancing Household Mobility
The current stamp duty structure is highly prohibitive to home owners upsizing, downsizing and relocating for work in an ever more mobile society. The proposed changes will provide people greater ability to buy and sell property without the hindrance of a large upfront cost, which also impacts the ability to save for a deposit and utilise existing equity to re-purchase.
Stimulating Economic Recovery
As our economy recovers from the impacts of COVID-19, stimulation of the property market and bringing additional buyers into the market is evermore prevalent.
Indicative applicable rates
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Residential owner occupied properties will attract an annual fee of $400 and an annual 0.3% ad valorem annual tax rate based on unimproved land value (ULV), similar system as applied to council rates
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Residential investor owned a $1500 annual fee and 1.1% ad valorem
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Farmland nil annual fee and 0.3% ad valorem
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Commercial properties nil annual fee and 2.6% ad valorem
Source: NSW Property Tax Proposal, Progress Paper for June 2021