“This is the reform we need to implement,” Treasurer Dominic Perrottet said as he announced the state’s biggest tax reform in decades during today’s budget. The main component: Stamp duty to be phased out to boost the economy as NSW records a historic $16 billion budget deficit.
The government will seek community consultation on its proposed model to replace the transfer tax until March, which would give people buying a property the choice between paying stamp duty upfront or opting for the smaller annual property tax. The present stamp duty concessions for first home buyers would also be replaced with a $25,000 grant, with the option of using the money on refurbishing the property.
Some of the other measures announced include:
- An $812 million investment in new social housing.
- Payroll tax will also be overhauled, with the rate to be reduced from 5.45 per cent to 4.85 per cent, which will deliver businesses savings on average of $34,000 a year over the next two years. The change will cost $2.1 billion in revenue to the state.
- The threshold for when payroll tax kicks in will be permanently increased from $1 million to $1.2 million and small businesses that do not pay the tax will be given $1500 in vouchers to help pay government and council fees and charges.
- NSW will spend $29.6 billion on its COVID-19 response over the next five years.
- NSW has also committed $4.4 billion to bushfire response and recovery measures after its horror Black Summer fires and $4 billion on drought.
- The government will give every adult four separate $25 digital vouchers to use at eateries and on arts and tourism attractions in a $500 million program to support struggling businesses.
- More than $337 million will be spent to put tutors in all public schools to help students struggling after homeschooling and free pre-school will be extended for 44,000 children in NSW.
What impact will this have on Sydney real estate? Will it take some of the heat out of the Sydney property market? Perhaps some buyers will put their plans to move on hold until stamp duty has been completely phased out. As further details about these changes are made publicly available, we will comment further.
Sourced from smh.com.au