Real estate in Australia, particularly in New South Wales, will be about $500 cheaper for the average property buyer starting next year. According to the NSW government, it will be making the “most significant reform in a generation” to the controversial stamp duty regime by indexing the tax to inflation.
Starting 1 July 2019, the seven stamp duty brackets will rise in line with inflation. As stated by NSW Treasurer Dominic Perrottet, this is the first significant change that will be made to the price brackets since 1986. The median house price back then was $100,000. It has now climbed to $1 million.
“Whether you are a first home buyer a downsizer or upgrading to the family home you will ultimately benefit as a result of this reform. Pegging stamp duty to CPI (Consumer Price Index) will reduce the tax burden on homebuyers allowing them to put more money towards a deposit.”
“Easing the cost of living pressures for the people of NSW”
The NSW Treasury indicated that between 2012 and 2017, as the median house price in Sydney climbed from around $400,000 to $1 million, bracket creep had caused the average rate of stamp duty to increase from 3.37% to 4.05%.
Thanks to a strong NSW budget, Mr Perrottet said they are now able to deliver “consistent and genuine reform after being left to pick up the pieces following years of disastrous economic management under Labor.”
He adds, “The Liberal and Nationals Government is committed to addressing housing affordability, cutting taxes, and easing the cost of living pressures for the people of NSW.”
First home buyer concessions in NSW
First home buyers in NSW are already enjoying a number of concessions which includes being exempt from paying stamp duties on real estate valued under $650,000. In addition, stamp duty on properties valued under $800,000 is discounted for first home owners.
Mr Perrottet said that this new reform combined with these first home buyer concessions will make it even more easier for people in NSW to make their dreams of purchasing their first Australian real estate an actuality.
If you need assistance with tax compliance in Australian real estate, contact a Chan & Naylor accountant near you, and we’ll be more than happy to help.
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