NSW Premier Mike Baird announced his first State Budget last month, with figures showing just how much money the NSW real estate market generates for the economy. Despite this, the Budget failed to represent the growing housing market.
NSW Treasurer Andrew Constance said in the 2014 Budget Papers that “resurgence in the property market has significantly lifted transfer duties in 2013-14”. Transfer duty contributed $5.898 billion of State Budget revenue in this timeframe.
The Government expected stamp duty on residential property market transfers to increase by 20.5 per cent, however revenue exceeded expectations and increased by 35 per cent to $5.898 billion compared to the original budget estimate of $4.96 billion.
REINSW’s lobbying efforts to push the NSW Government to review stamp duty rates are vindicated by the State Budget figures.
“Almost $1 billion of extra revenue has come out of the property market. It is time to review stamp duty rates for the first time in 40 years and give extra incentives to first homebuyers and older Australians,” REINSW President Malcolm Gunning said.
Industry analysts have reviewed the figures in the revenue statement and compared GST revenue to stamp duty. GST revenue in 2014-15 is estimated at $6.094 billion rising to $6.862 billion in 2017-18. By comparison transfer duty revenue in 2014-15 is estimated at $6.095 billion, but is set to increase to $7.256 billion in 2017-18. Land tax will increase from $2.497 billion in 2014-15 to $2.87 billion in 2017-18.
The total NSW taxation revenue in 2013-14 was $24.129 billion. This is 7.7 per cent higher than the 2012-13 outcomes. These figures mean the NSW Government can get the Budget ‘back in the black’ a year sooner than predicted in 2013.
What else did the Budget achieve?
First homebuyers are now able to spend up to $750,000 on a new home to qualify for the $15,000 First Home Owners Grant. The Budget also included an extra $83 million for a housing acceleration fund designed to open up land and expedite developments in south-west Sydney.
Changes to the eligibility criteria for the New Home Grant mean from the 1 July 2014, the grant will be restricted to Australian citizens and permanent residents. The grant will also be restricted to one grant per person, per year.