A new property tax has been slipped before the NSW parliament in the wake of Treasurer Wayne Swan’s election-year Budget.
The tax, which was recently announced by Lands Minister Tony Kelly, will be applied to properties selling for more than $500,000 in both the residential and commercial sectors. This will add an additional $200 to fees for an average Sydney house purchase worth $600,000. Beginning from 1 July 2010, the tax is estimated to bring the government approximately $90m annually.
“What we are seeing here is the Keneally government trying to claw back the GST handed back to the commonwealth for hospitals the only way it can – by hitting property owners hard and fast,” said REINSW president Wayne Stewart.
Describing the move as a “tax on the mortgage heartland of NSW”, Stewart said that over half of the 50 local government areas in Sydney had house prices in excess of $500,000. "That means in hundreds of suburbs across Sydney alone, homebuyers will get hit with additional fees of anywhere between $200 and $1,000 for properties valued up to $1m.”
The new tax will be imposed at a rate of 0.2% for land transactions between $500,000 and $1m. For purchases above $1m, the tax will be charged at a rate of 0.25%, with a $1m home attracting an extra $1,000 in fees.
The Property Council of Australia has also urged the NSW government to reconsider the tax, stating that it will damage growth and investment. “NSW is a repeat offender when it comes to introducing new taxes on residential and commercial properties,” said NSW scting executive director Glenn Byres. “NSW has a fragile investment climate and construction levels are only beginning to creep back from 50-year lows. We should be looking to wind back taxes, not add to the burden of homebuyers and investors,” he said.
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