Why NSW Govt Proposed Changes To Stamp Duty Need To Be Rolled-Out Retrospectively

Historically whenever the state government makes decisions around new initiatives for the property market, they typically adopt a specific launch date for when the changes take place, but this time around I believe the government really need to roll-out the changes to Stamp Duty retrospectively.

In fact, Treasurer Dominic Perrottet MP posted on his Facebook page a link to an article in Saturday’s SMH regarding a five-point strategy for NSW which includes abolishing Stamp Duty

I reached out to the NSW Treasurer today in the hope that he would look at rolling this initiative out retrospectively…

Dominic, this is a welcomed initiative, but, you need to specify timing before announcing changes like this. I believe that your timing of this announcement is actually going to further stall the market if it remains as open-ended as it currently stands.

The property market is going through enough uncertainty during Covid-19, now it’s likely buyers may hold off from purchasing unless the Government comes out with a follow up briefing to the media that axing stamp duty will be retrospective to your media announcement on Saturday.

With the potential that such an enormous, unnecessary expense is likely to be removed from the property transaction equation, it is a very welcome decision for people looking to move, but, by not announcing a timeline and alerting the media of the abolishment of Stamp Duty is a poorly timed release, if it turns out that the proposed changes are only in the concept phase at this stage.

I believe the best approach from here would be to make an announcement that the changes to Stamp Duty are retrospective which will allow the property market to move forward on its own merits, or withdraw your statement altogether so people can get on with their lives.

Stamp Duty is such a prohibitive expense, and as John McGrath said in his article earlier today titled STAMP DUTY IMPACTS OUR ABILITY TO MOVE HOUSE,

Stamp duty is easily the worst of the taxes that residential owners have to pay every time they buy a new house. It’s calculated based on the purchase price and there’s been little change to it despite prices rising significantly over the past three decades. 

The median house price in Sydney in 1990 was less than $200,000, on which you’d pay about $5,500 in stamp duty. Today, it’s above $1 million and the duty is more than $40,000. 

As a result, many families are living in cramped environments or far away from their work or their kids’ schools because moving is simply too expensive. 

Data shows that people are staying put longer in their current homes and this has implications for society.  

To read more about this, check out John’s article here and the announcement in the SMH here

It’s going to be interesting to see how quickly the NSW Government moves on this announcement and how they roll it out.

Let’s hope they provide some certainty sooner rather than later, because leaving it up in the air won’t benefit anyone and it will only serve to build a level of resentment, especially amongst property owners who are wanting to sell and buy in the current market.

Regards

Greg Vincent