Leading property experts are calling for the NSW government to follow Queensland's lead and bring forward the abolition of mortgage stamp duty to help stimulate activity in the property market.
The Queensland government recently announced that it was bringing forward the abolition of mortgage duty from 1 January 2009 to 1 July 2008; accordingly, in less than four weeks, NSW and South Australia will be the only jurisdictions in the country that still impose this form of duty.
Unlike SA and all other jurisdictions that have abolished mortgage duty over time, NSW continues to levy the duty at the full rate of $4 per $1,000, or $400 per $100,000 borrowed.
Peter Faludi, senior counsel at law firm DLA Phillips Fox, urged the state government to bring forward its plan to abolish mortgage duty in 2009.
"Given the additional costs to borrowers in raising debt finance in the current markets, it's difficult to understand why NSW continues to impose this form of duty," Faludi said.
"Although there are some minor concessions, the acute housing shortage and the lack of property development should indicate that any tax breaks that can be provided to the property industry should be seriously considered."
The NSW government delivered its State Budget last week; however, there was no move to bring forward the abolition of mortgage duty, or reduce the rate, from the current proposed abolition date of 1 July 2009.