New state finance director Pirot. (photo by Sydney Morning Herald)
According to the Daily Telegraph and the Sydney Morning Herald, New York will be the first state in Australia to link stamp duty bands to the Consumer Price Index (CPI). The move could save an average A $500 in new state property transactions over the next few years.
It is reported that this is the largest stamp duty reform in about 30 years in the new state, promoted by finance director Robert (Dominic Perrottet) `s office. Perot will announce the plan this morning.
Under the reform plan, starting in mid-2019, the 7-tier price range, which determines how much stamp duty will be paid by buyers, will be adjusted to inflation levels. The government said the new measures would reduce the average stamp duty paid per property transaction by about A $500 by 2021. The amount saved will also increase over time.
It is understood that new state stamp duty has not been adjusted for 32 years, even though median house prices have been estimated to have risen by 1000 percent during this period.
The new state`s current stamp duty rate was set in 1986. The median home price in Sydney was A $80, 000 at the time, according to CoreLogic. And the city`s current median house price is just over A $1 million.
Now in Sydney, a typical buyer pays A $42000 in tax on a flat. This is a heavy tax burden for young buyers who are new to Sydney`s high-priced property market.
In FY17 / 18, buyers of residential and commercial properties in New York paid a total of A $9.8 billion in stamp duty. Stamp duty revenue has accounted for 28% of the new state`s total revenue.
But in the new state budget for fiscal year 2018 / 19, the government expects stamp duty revenues to fall to A $5.6 billion. In addition, the state said in August that 35,000 people had saved as much as A $34360 each when they first bought their homes, thanks to affordable housing measures in the new state.
At present, new state first-time buyers buy less than 650000 Australian dollars of property, free of stamp duty; purchase of 650000-800000 properties, but also reduce stamp duty.
Labour, however, said the new state`s stamp duty reform was "too late" and "too small". "our housing boom, which has been going on for five years, has only recently begun to cool down," said New State Shadow Finance Director Parker (Ryan Park). It`s too late. "
He also said that despite the recent housing downturn, the A $500 cut would still be a drop in the water for Sydney people seeking to enter the market. "at present, the average stamp duty is just under A $40,000, so it is difficult to make a big change."
