Acting on a key recommendation in the NSW Federal Financial Relations review, the 2020–21 state budget has proposed a model to allow property buyers to choose between stamp duty at the point of purchase or lock themselves in to an annual tax based on land value.
“Stamp duty is a relic from a bygone era when you picked one career, started a family, bought a home and basically settled in for life,” Mr Perrottet said.
“It adds tens of thousands of dollars to the cost of the biggest financial commitment most people ever make.
“If you want to move, change jobs, or switch careers, upsize or downsize to match your family size, stamp duty can be the spanner in the works.”
CPA Australia general manager of external affairs Dr Jane Rennie said the time was ripe for a review of stamp duty in Australia, with NSW’s proposal to place pressure on other states and territories.
“Capital is mobile, and if the proposed NSW approach were perceived as financially advantageous, the property market in that state could become more desirable to interstate purchasers, particularly investors, although there are a range of other factors that would also influence their decision,” Dr Rennie said.
“The choice between stamp duty or an annual property charge would not be straightforward. Factors which may influence a buyer’s decision include the length of time the property will be held and whether it will be a primary residence or investment. Buyers would require independent advice from a qualified professional to identify the best option for them.”
Other measures announced by Mr Perrottet on Tuesday’s budget include a two-year reduction in payroll tax from 5.45 per cent to 4.85 per cent from 1 July 2020 to 30 June 2022.
The reduction will complement an increase to the state’s payroll tax threshold of $1.2 million, up from $1 million.
Businesses that create at least 30 new net jobs in NSW will also be granted a four-year payroll tax-free period.
Small and medium-sized business which do not pay payroll tax will be given a $1,500 digital voucher, to be used towards the cost of any government fees and charges before 30 June 2022.
The voucher will be made available through the MyService NSW portal from April 2021 and operate as a rebate, where a claim can be made after fees and charges have been paid.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.