Things that make you go Hmmmm — NSW Stamp Duty
One of those things that make us all think Hmmm is NSW Stamp Duty. Particularly the duty that is levied on our residential property.
Our transfer of stamp duty is based upon a progressive tax system where cheaper properties incur a lower rate of tax and more expensive properties incur a higher rate of tax.
Some Australians would say that this tax system is reasonably fair. I will leave that discussion for the comments bellow.
However, as house prices continue to rise, average people that want to buy average family home are being pushed into the higher taxation brackets that were originally designed to tax the very wealthy.
The common phrase used to define this situation is bracket creep.
The climbing value of property in NSW is currently proving to be a cash cow for the NSW government as bracket creep kicks into high gear.
Here are some numbers that will create plenty of Hmmmms all over NSW:
1. The average amount of stamp duty paid by each residential property buyer over the 2012/13 financial year was $20,647. Compare this to the average in 2005/06 of just $14,471. An increase of $6,175 per property in 7 years. Hmmm.
2. The NSW government pocketed an additional $577,580,193 in residential property stamp duty this financial year compared to last financial year. This is over half a billion more than the year before. Hmmm.
3. 10% more properties were sold in the 2012 — 2013 year compared to 2011 — 2012. However, NSW stamp duty collections grew by 17%. Hmmm.
Given the above, I think it is time for a review of the Stamp Duty thresholds.
As all of the economists keep telling us, the housing industry (particularly in NSW) must pick up the slack being left behind by the decreasing mining boom. What better way to get things moving than by tweaking this tax system to better suit the average person..
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