Plans to overhaul the New South Wales property tax system have broad support in the community, public consultations have revealed, as the state government seeks to phase out stamp duties in long term.
Treasurer Dominic Perrottet on Friday released a progress document on his government’s property tax proposal, first discussed late last year.
The reform would give homebuyers in New South Wales the choice of paying a stamp duty or paying an annual property tax depending on the value of their land and the use of their property.
Once a property is subject to the new property tax, subsequent owners must also pay the tax, gradually eliminating the stamp duty over time.
Those who have already paid stamp duty on their property will not be subject to the new property tax on that property.
Perrottet said in a statement Friday that the government has so far received more than 250 submissions from industry players and community figures, with the public consultation scheduled to end in late July.
He said comments to date had shown broad support for a change to NSW’s existing property tax system, which he said stifles economic growth and discourages real estate transactions.
He said early home buyers – who currently pay partial stamp duty on properties priced over $ 650,000 and full stamp duty over $ 800,000 – were particularly supportive of a policy change. .
For these people, saving for a real estate deposit in the midst of soaring house prices while saving to pay stamp duty on higher value properties – such as homes – was seen as unmanageable.
The progress document also found that residents were becoming more and more comfortable with the property tax proposal as they learned more about it.
“The first round of consultations and submissions showed that 84% of people believed stamp duty reform was needed and two-thirds of the community said stamp duty was a significant barrier to accessing stamp duty. ownership, ”Mr. Perrottet said.
The government maintains that its proposed reforms would inject $ 11 billion into the NSW economy in its first four years in money otherwise spent on stamp duties.
According to government figures, an owner-occupant of a home with a property value of $ 405,600 would pay $ 1,617 in property taxes annually.
However, the proposals would require significant Commonwealth aid in the short term, as the NSW government forgoes stamp duty revenue.
The committee’s chief executive for Sydney, Gabriel Metcalf, said in a statement on Friday that the think tank fully supports the property tax proposal.
Mr Metcalf said the Commonwealth should offer payments to states such as NSW to top up their stamp duty coffers.
“Our economy and home buying habits have changed dramatically since the tax was introduced in New South Wales in 1865,” said Mr Metcalf.
“As we emerge from the pandemic, now is the time to reform and bounce back stronger as a state and a nation.
“Removing the stamp duty on real estate purchases and replacing it with a broad-based annual property tax will be a key part of our rebound.”