NSW property tax proposal
It’s proposed to abolish stamp duty on NSW land purchases – but there’s a catch!
The NSW Government is considering a proposal that people who are about to buy a property can choose between paying stamp duty upfront, or paying a smaller annual property tax instead. The proposal applies to commercial as well as residential property, but let’s just look at how It might affect homebuyers.
If the proposal is implemented, homebuyers then could consider which form of tax would best suit their own circumstances. As stated in a Treasury paper, “If people plan to move home frequently, they might choose the property tax. If they plan to buy their ‘forever home’, which they intend to live in for decades, they might choose to pay stamp duty.”
As also stated in the Treasury paper, however, “Once a property has been opted-in, the property would remain subject to the property tax for all subsequent future buyers of that property.” Over time, more properties would become subject to the property tax and the Government estimates that, within 20 years, at least 50% of all properties would become subject.
The property tax annual rate is proposed to be a percentage of the property’s unimproved value.
The consultation period on the proposal is now closed, so we now all await a decision whether this proposal will proceed and, if so, in what form.