NSW budget: government announces plans to phase out stamp duty
The state government’s plans to phase out stamp duty would save house hunters tens of thousands of dollars in upfront costs and boost market activity, but experts warn it could also put upward pressure on property prices.
Buyers in NSW could be given the option to opt out of stamp duty and instead choose a smaller annual property tax, it was unveiled in the budget on Tuesday, with the government announcing it would begin a public consultation process on property tax reform.
“This proposed model would give buyers a choice to axe stamp duty at the point of purchase and choose an annual property charge instead,” NSW Treasurer Dominic Perrottet said in his budget speech.
“There would be no impact unless you are purchasing a property and you make the choice to change. For everyone else, everything stays the same.”
The reform, which could be set in motion in the second half of 2021, could inject as much as $11 billion into the state’s economy over four years and generate 75,000 new jobs.
The proposed model includes a property tax rate that would be lower for owner-occupiers, with higher rates for investors and commercial properties.