Stamp duty for a property is always a bit of a hard pill to swallow. Luckily there are some reforms on the horizon in NSW! But what does it all mean?
The NSW Government has just announced what they consider to be the most significant stamp duty reform in a generation.
From 1 July 2019, stamp duty on property will be pegged to the Consumer Price Index (CPI).
This means modest savings on stamp duty in the short term and savings that will grow over time for future home buyers.
The NSW government predicts that pegging stamp duty to CPI will reduce the average amount of stamp duty on property purchases by $500 by 2021.
Stamp duty brackets hadn’t been changed significantly since 1986 when the average price in Sydney was $100,000 compared to $1,000,000 now.
The bracket creep over the years without any indexation means property buyers have been paying significantly more stamp duty in recent years than would have been intended when the brackets were introduced.
Stamp duty revenue nets the NSW Treasury billions of dollars per year so it’s not surprising the reforms haven’t matched the expectations of many industry bodies.
The indexed brackets will apply to contracts entered into after 1 July 2019.