Calls for stamp duty — a tax which brings in roughly $20 billion for states and territories annually — to be axed have been growing in popularity since the beginning of the pandemic, and on Tuesday, New South Wales Treasurer Dominic Perrottet announced plans to make stamp duty optional.
Under the proposed government plan, released in Tuesday’s budget plans, Perrottet said stamp duty will be optional, with buyers given the option between paying a one-off whopping stamp duty bill, or a smaller annual land tax.
“This is the single most important economic reform we can tackle to turn the Australian dream into NSW’s reality,” Perrottet said in a statement, according to News.com.au.
“This is a reform proposal for NSW where more people can own their home and have more freedom to choose the right property for their family at every stage of life.”
“This is a vision for every person and family in NSW – from first home buyers trying to get a foot on the property ladder, to frontline workers moving to service our regional communities, and retirees who are ready to downsize.”
In fact, a previous analysis of census figures by research body Australian Housing and Urban Research Institute (AHURI), found, when it came to downsizing, the cost of stamp duty was the biggest barrier to purchasing a smaller property, closely followed by the cost of moving and the potential impact of sale proceeds on the age pension.
“Stamp duties can have a substantial effect on property transactions, with a 10 per cent increase in stamp duty lowering turnover by 3 per cent annually,” the AHURI report stated.
The news comes after research conducted by Finder found that more than two-thirds of economists predicted stamp duty will be scrapped by the end of 2021.
“Stamp duty makes the process of buying a home even harder,” Finder Insight Manager Graham Cooke said at the time. “Not only do borrowers have to save a 20 per cent deposit, they also need to save well over $10,000 – in some cases more than $80,000 – for a tax that generally cannot be included in your mortgage.”
Stamp duty is a government tax on certain transactions. You generally need to pay it when you buy a motor vehicle, insurance policy or real estate.
In relation to property purchases, the amount of stamp duty will vary depending on where you live, the type of transaction taking place, and its value. By using an online Stamp Duty Calculator, you can determine how much stamp duty applies to the property you plan to purchase. The amount may also depend on the type of property you are buying, or whether you’re purchasing an established home, new home or vacant land.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.
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