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Bipartisan support for Perrottet’s stamp duty tax reform

“We need to know two things. One, if this will actually encourage more people to be able to buy a house or change property if they want to. And then the second thing is, is it fair?” she said.

“Is it fair for someone in Bringelly or The Ponds to pay the same rate… as someone in Hunters Hill or in Bellevue Hill? I’m not convinced that it is.”

NSW Premier Gladys Berejiklian bumps elbows with Treasurer Dominic Perrottet as she congratulates him after delivering the state budget on Tuesday.

NSW Premier Gladys Berejiklian bumps elbows with Treasurer Dominic Perrottet as she congratulates him after delivering the state budget on Tuesday.Credit:Dean Lewins

Under the proposal, the tax for owner-occupied residential properties would be $500 plus 0.3 per cent of the unimproved land value, as occurs with council rates.

Once a property is subject to the tax it will apply for the life of the property, so subsequent owners must also pay.

The Treasurer said it was incorrect to say people would pay the same amount of a proposed tax based on unimproved land value, because property values differed so greatly across NSW.

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“The NSW government [will] embark on public consultation on proposed changes to the state’s property tax system,” Mr Perrottet said.

“This is an opportunity to hear from the people of NSW about how changes to the system could help them and are keen to hear feedback from everyone including the opposition leader.”

NSW Treasury estimates the average land value for residential property is $437,500, meaning an average property would attract an annual tax of $1812.

In metropolitan NSW the average unimproved land value is around $630,400, amounting to an average annual tax of $2391.

Mr Perrottet on Tuesday said it could take around 20 years for half of all houses in NSW to fall under the new system.

Stamp duty adds $34,000 to the upfront cost of buying the average home in NSW. It takes on average 2½ years to save to pay stamp duty compared with one year in 1990.

Under the proposal, owner-occupied homes would be liable for lower rates than investment properties. However, protections would also be put in place so that the property tax would not result in rent increases without a tenant’s agreement.

First home buyers, who have stamp duty concessions for properties of up to $800,000, would be given a grant of up to $25,000 to go towards the tax or home refurbishing.

Ms McKay on Wednesday said she was “disappointed” the Treasurer had not accepted her offers to discuss tax reform ahead of Tuesday’s budget delivery.

“If you’re going to look at major reform, which we are supportive of, then you should be engaging with the opposition, you should be having a discussion, knowing the significance of this and the structural implications of this for the budget,” she said.

“We know that taxation reform has to happen. We believe that payroll tax reform has to happen, and we believe that stamp duty reform has to happen.”

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