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NSW Budget fails to address bracket creep

22 June 2016

The NSW government has failed to address bracket creep for the 30th consecutive year as homebuyers continue to be ignored in the budget, according to the Real Estate Institute of New South Wales.

REINSW President John Cunningham said all residents of NSW are affected by the government’s decision to continue to overlook bracket creep.

“It is unbelievable that the NSW government has again failed to review stamp duty bracket creep and continues to leave homebuyers out in the cold,” Mr Cunningham said.  

“NSW Transfer Duty revenue for 2015-16 is more than $1 billion over Budget  at $8.886 billion, instead of the forecast $7.841 billion.

“Looking ahead NSW Transfer Duty revenue for 2016-17 is budgeted at $8.777 billion, still more than the Transfer Duty Budget for last financial year 2014-15 of $7.29 billion and almost as high as the 2015-16 original budget of $7.841 billion, notwithstanding abolition of duty on transfers of non-land business assets from 1 July 2016.

The foreign investor surcharges in relation to NSW residential land are budgeted to bring in over $1 billion revenue over the next 4 years to 30 June 2020 which means that it is unlikely that the measures will operate to take pressure off the price of NSW residential land.

“It is time for the greed to stop. Year after year, budget after budget, the NSW government has the opportunity to support first homebuyers and those looking to purchase property and it continues deny them a fair go.

“Affordability is essential to the continued viability of our great state and the nonsense must stop,” Mr Cunningham said.

New property related taxes in the 2016-2017 budget:

  • 4% stamp duty surcharge on foreign persons acquiring NSW residential land, from 21 June 2016
  • 0.75 per cent land tax surcharge on foreign person owners of NSW residential land and no threshold and no principal place of residence exemption for such foreign persons in relation to NSW residential land, from 2017 land tax year
  • Emergency Services Levy to be substituted with Emergency Services Property Levy from 1 July 2017.

Taxes previously legislated to be abolished from 1 July 2016 are confirmed to be abolished from that date, namely NSW Mortgage duty, NSW Transfer duty on transfers of unquoted marketable securities and NSW Transfer duty on transfers of non-land business assets.