NSW land tax revenue % increases to outdo stamp duty revenue growth
Jonathan ChancellorDecember 7, 2020
NSW land tax revenues are forecast to rise at a faster rate than stamp duty revenues, according to the NSW state budget papers.
There is an expected 5.7% annual average boost in land tax paid by NSW investors over the four year forward period, rising from $2.49 billion to $3.11 billion in 2018-19.
No change in the tax rate, just reflecting growth in land values.
Home purchase stamp duty revenues are forecast to rise 4.2% over the period, from $7.29 billion this year to $8.6 billion in 2018-19..
In 2015-16 transfer duty is expected to increase by $551 million, up 7.6 compared to 2014-15, with residential duty tipped to be 11.8% higher.
Stamp duties remain a levels mostly introduced three decades ago.
Duty is calculated on the total dutiable value of the property subject to the transaction.
| Value of the property subject to the transaction | Rate of duty |
| $0 - $14,000 | $1.25 for every $100 or part of the value |
| $14,001 - $30,000 | $175 plus $1.50 for every $100, that the value exceeds $14,000 |
| $30,001 - $80,000 | $415 plus $1.75 for every $100, that the value exceeds $30,000 |
| $80,001 - $300,000 | $1,290 plus $3.50 for every $100, that the value exceeds $80,000 |
| $300,001 - $1m | $8,990 plus $4.50 for every $100, that the value exceeds $300,000 |
| over $1m | $40,490 plus $5.50 for every $100, that the value exceeds $1,000,000 |
| Premium Property Duty: over $3m | $150,490 plus $7.00 for every $100, that the value exceeds $3,000,000. |
Investors paid $2.49 billion in land tax during the current 2014-15 fiscal period, up from $2.33 billion in 2013-14.
The benchmark tax base is the average of the last three years unimproved land value of all land owned, on 31 December of the previous year, that is above the indexed threshold for that year (as defined in the Land Tax Management Act 1956), excluding land used for owner-occupied residences, or by the Commonwealth or NSW Governments.
The benchmark tax rate for the 2015 land tax year is $100 plus 1.6 per cent of the land value between the thresholds of $432,000 and $2,641,000, and 2 per cent thereafter.
The government's lesser known property tax, the inner city parking space levy revenue will rise 2.3% over the period, grossing $105 million this year.
The recent strength in the Sydney property boom was being especially driven by properties valued over $1.2 million, the NSW State Budget revealed, but the housing boom longevity is not being assumed by the NSW Treasury.
No change to NSW first home buyer grants in the state budget could intensify activity before the grant's 1 January 2016 reduction.
Jonathan Chancellor
Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.
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