Stamp duty relief for home buyers looms as a major state election issue, with Labor announcing it will oppose cuts announced by the government.
Treasurer Dominic Perrottet said on Monday NSW would become the first state to tackle stamp duty bracket creep by indexing payment levels to the consumer price index (CPI).
Mr Perrottet said, by 2021, the average stamp duty paid on property transactions would fall by about $500, with bigger savings in following years.
Shadow Treasurer Ryan Park said the stamp duty announcement was “a cheap election stunt by a dying government in its last days”.
Mr Park said Labor would not support the changes.
“We will invest every dollar back into essential services including teachers, nurses and police along with schools and hospitals,” he said.
“Now is not the time for new indexation arrangements when revenue is already falling – a $100 cut in stamp duty will do nothing to help someone achieve buying their first home.
“If the NSW Liberals were serious about relief for home buyers then they would be supporting federal Labor’s negative gearing reforms.
“The people who will benefit from these cuts are the ones who can afford it the most and they’re the ones buying homes above $3 million.
Mr Park said Mr Perrottet delivered his budget just a few months ago without any mention of indexing stamp duty.
Mr Park claimed the government would backflip on the cuts if re-elected in March, 2019.
Stamp duty relief for home buyers in NSW is on the way, although initial savings will be “modest”.
NSW will become the first state to tackle stamp duty bracket creep by indexing payment levels to the consumer price index (CPI).
The changes will affect transactions made on or after July 1, 2019.
The government says, by 2021, the average stamp duty paid on property transactions will fall by about $500, with bigger savings in following years.
Treasurer Dominic Perrottet said, in the short term, the savings would be modest but, over the long term, would be substantial.
“The reform is the most significant in a generation, with the current system having remained largely unchanged for over 30 years,” he said.
“We haven’t seen any significant action on stamp duty brackets since 1986 when the median house price in Sydney was $100,000 – now it has climbed to $1 million.
“Whether you are a first homebuyer, a downsizer or upgrading to the family home you will ultimately benefit as a result of this reform.”
Mr Perrottet said, over the past 15 years (2002-2017), bracket creep had resulted in the average rate of stamp duty payable increasing from 3.37 per cent to 4.05 per cent as the median house price in Sydney rose from around $400,000 to $1 million.
“If stamp duty brackets had been indexed to CPI 15 years ago the amount payable on a $500,000 home would today be around $2000 lower (an 11 per cent tax cut) and the the stamp duty payable on a $1.5 million home would be around $6400 lower (a 9.4 per cent tax cut).”
The NSW Greens called for “more serious tax reform”, saying the changes “make a mockery of the challenges faced by home purchasers and renters in Sydney”.
“It does nothing to address the housing affordability issues in NSW,” said Treasury spokesman Justin Field said.
“The government has offered up $185 million in stamp duty savings to NSW home buyers over the next three years, while at the same time it has presided over a doubling in stamp duty take from residential property transfers from around $3 billion when it came to office in 2011 to more than $6 billion last year.”