NSW almost debt free thanks to stamp duty

By |
The strength of the property market in New South Wales has helped the state government become almost debt free, as it benefits from increased stamp duty revenue.

According to a budget update released yesterday, NSW’s net debt level has shrunk to $1.8 billion, the lowest it has been in two decades.

The reduced debt levels are thanks in part to an additional $863 million which has been collected in stamp duty charges since June budget estimates.

According to the government, around $430 million of that came from stamp duty associated with the sale of electricity provider TransGrid, but a large proportion of the remainder came from property transfers.

“The windfall transfer duty we are expecting to receive in 2015-16 is primarily made up of stamp duty from the TransGrid transaction and commercial and industrial property transfers," NSW Treasurer Gladys Berejiklian said.

The government’s increased revenue announcement has again prompted the Property Council of Australia (PCA) to go on the attack as it renews calls for the tax to be abolished.

“Stamp duty is our most damaging tax and hurts homebuyers, businesses and the economy," PCA NSW executive director Glenn Byres said.

“NSW continues to haul in record levels of stamp duty – which has doubled in the past four years from around $4 billion to well above $8 billion,” Byres said.

While Berejiklian said earlier this week that stamp duty revenue is expected to moderate as Sydney’s property market cools in the coming year, Byers said the damage has already been done.

“The affordability woes facing homebuyers are exaggerated by stamp duty, which forces the average homebuyer in Sydney to find an extra $35,000 when they purchase a house,” he said.

“Stamp duty hurts people trying to crack the housing market, families needing to buy up as they grow, and people wanting to downsize later in life.

“And signals about a slowdown need to be treated with caution – as stamp duty is still poised to rise by approximately 15% this year and stay above $8 billion for the next few years.”

But Byers and the PCA may be protesting in vain, with one tax expert believing stamp duty is likely to be around for the foreseeable future.

“Our view is that stamp duty is likely to be here until will see substantial changes to areas like payroll tax and the GST,” David Shaw, director at accountancy firm WSC Group, said.

“It’s an inefficient tax, but it’s one that people are going to have to keep factoring in,” Shaw said.

While there was speculation earlier this year that an increased or expanded GST could be implemented to replace stamp duty, Shaw said that’s highly unlikely.

“We’re not going to see an increase in the GST until the states can agree to it and that’s not going to happen anytime soon.

“They all want to protect their self-interests and there will need to a whole discussion about how the GST revenue is distributed among the states.”
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : leumeah , ropes crossing , westbrook , mt gravatt , sth toowoomba

go back
Comments
  • Rachid Merkbawi says on 18/12/2015 09:26:59 PM

    I hope the government looke after the first home buyers for little coz some times we can't afford the extra charges and at the same time the investors killing the market

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

Why does  Aussie need your personal information?    How does Aussie keep your information secure?
Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a partly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945.
© 2016 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

 
How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here