jamie-davies-hao52fu9-f8-unsplash

Perrottet seeks support from Federal government to replace NSW stamp duty

Market Insights
1 year ago
1 minutes

This Friday, NSW premier Dominic Perrottet will meet with prime minister Anthony Albanese to discuss the prospect of federal government support to replace the NSW stamp duty. 

Perrottet has previously championed the idea of replacing the stamp duty in NSW with a land tax, more recently calling the stamp duty the “worst tax any state can have”. 

In June 2021, the Australian Financial Review (AFR) reported that if stamp duty were to be replaced with a land tax at a rate of $500 + 0.3 per cent in land value, then project payback would take between nine and forty-five years for residential owner-occupied properties. This is based on data collected by Business NSW. 

Following Business NSW’s data collection, progress reports cut the suggested minimum land tax payment to $400, which extends the expected return periods identified by Business NSW and the AFR. 

Daniel Hunter, Chief Executive of Business NSW, stated at the time that to help the NSW government deal with the financial ramifications of this kind of tax reform, the federal government would need to step in. 

Friday’s upcoming discussion between Perrottet and Albanese comes just ahead of NSW’s new budget, which will be announced next Tuesday. 

In the budget, the NSW government is expected to reveal a number of proposed reforms aimed at housing policy and affordability. 

According to The Guardian, NSW collected approximately $9.4 billion in stamp duty over the last financial year. This made up approximately 28% of the state’s local tax revenue. 

The state treasury department previously estimated that an optional land tax would leave the budget short of approximately $2.5 billion a year. 

Ahead of the 2022-23 budget announcement next week, Perrottet has said that major tax reform is dependent on federal assistance. 

For more news, market insights, and lifestyle, click here.  

Header image source.