NSW Government seeks to reform property stamp duty

NSW stamp duty is set to be reformed for the first time since 1985 when the rates were amended.

The government is seeking public feedback on the proposal to replace stamp duties with a broad-based land tax.

The change was mooted in the New South Wales state budget.

Treasurer Dominic Perrottet revealed plans to reform the “inefficient property tax system” currently in place, but will await the feedback before any implmentation.

The discussion will centre around transitioning from the current model of a mandatory upfront stamp duty, to one where buyers have the choice to instead pay an annual land tax on new property purchasers based on the value of their land.

The rates are set to vary for owner-occupiers, investors and commercial tenants.

"If implemented, the proposed changes could give you the freedom to choose between paying stamp duty upfront or paying a much smaller annual property tax, when you buy your next home," reads the NSW Treasury website. 

"Removing the upfront cost of stamp duty could remove tens of thousands of dollars from the home purchase process and make it easier for first home buyers, families looking to upgrade and others looking to change their property to save what is needed to purchase their next home.

"Unless you are buying a property, there would be no change. If you have already paid stamp duty on your existing property, you would not be subject to an annual property tax. There would be no double taxation."

The HIA executive director David Bare noted stamp duty was impeding the ability of the population to shift to pursue education and employment opportunities elsewhere. 

“Stamp duty is an inequitable tax which falls on a small cohort of taxpayers who need to move for varying reasons including for employment, education and training, health or financial reasons," Bare said.