NSW Slashes Stamp Duty

by Mary Swire, Tax-News.com, Hong Kong

10 June 2010

Turning deficit into surplus, the New South Wales government has announced a budget which includes stamp duty cuts totaling AUD140m (USD117m), including Australia's first 0% tax, for off-the-plan purchases worth up to AUD600,000 (USD0.5m).

The stamp duty concessions applicable to new builds follows a similar initiative in Victoria, where Labour government incentives have given new life to the property sector in Melbourne.

From July 1, stamp duty will be set at zero for the next two years for buyers of homes sold for up to AUD600,000 off-the-plan, before construction has started, saving up to AUD22,490. A 25% stamp duty discount has been granted to homes under construction or newly-completed worth up to AUD600,000.

Over-65s who sell up and move to a newly-built home priced up to AUD600,000 will also enjoy zero stamp duty in the next two years, a measure designed to encourage down-sizing to smaller homes for couples who need less space.

Councils will receive extra funds in order to speed up planning approvals, which together with the stamp duty concessions will cost about AUD184m over the respective two years.

Treasurer Eric Roozendaal announced a surplus of AUD101m for the 2009/10 financial year after a deficit had been forecast. For 2010/11 a surplus of AUD773m is projected. This compares with previous budget estimates of deficits out to 2010/11, including a deficit of AUD990m for 2009/10.

The stamp duty cuts are designed to boost employment in the building sector, particularly in regional areas where more houses fall under the AUD600,000 limit. An endorsement from the Property Council of Australia included projections from their own research suggesting that an additional 4,000 homes could be built as a result of the incentives.

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