NSW stamp duty change likely to leave many "worse off"

Many purchasers are likely to be disadvantaged by the proposed new system, says property valuation firm m3property.

NSW stamp duty change likely to leave many "worse off"
NSW stamp duty change likely to leave many "worse off"

The NSW Government’s stamp duty change may leave many commercial property owners “worse off”, according to property valuation firm m3property.

Owners of less valuable properties may potentially pay more than double after ten years.

Jennifer Williams, the firm’s national director of research, said it was unclear whether the new property tax would achieve its aims.

“We agree that change is required to make the NSW tax system fairer, simpler and less volatile and a broad-based property tax is a good option to achieve this”, she said.

“The devil is in the detail, however, and it is yet to be seen whether an opt-in system will achieve the simplicity the Government seeks or reduce the current revenue volatility given most commercial purchasers are unlikely to opt-in.”

Many purchasers are likely to be disadvantaged by the proposed new system, given the average length of commercial property ownership in NSW is greater than ten years, mp3property suggested.

A hypothetical case study found that after ten years the owner of a property with a market value of $2 million would pay $144,937 under the current system, and $298,061 under the new system.

NSW stamp duty change likely to leave many

Whilst the burden on commercial owner-occupier operators appears to be higher for the proposed property tax, stamp duty must also be taken into consideration.

For investors who buy and sell more often, the choice of which tax route to take may be more complicated.

However, the impact on purchasers is likely to vary on the type of purchaser, the property’s land value, the length of time the investor retains the property, and which option a buyer takes at purchase, property tax or stamp duty and land tax.

Max Kwok

Max Kwok

Max Kwok is a staff contributor at urban.com.au. Based in Sydney, Max has previously worked at Property Observer where he specialised in content creation and editorial research.

Tags: 
Stamp Duty NSW Commercial Property

Comments

Be the first one to comment on this article
What would you like to say about this project?