Over the last month or so I have had numerous discussions with people from all around the world about the level of Stamp Duty we pay in Australia on property transactions. In my opinion it acts as a huge disincentive for people to transact and puts additional and unnecessary barriers in place for buyers and vendors alike.
For those that aren’t aware buyers in NSW pay around 4% tax to the State Government – in addition to the purchase price of their property when they buy.
Who can forget the effect of the vendor duty that the New South Wales Government (for our international readers, Sydney is the Capital City of the State of New South Wales – NSW) decided to charge on the sale of investment properties. That 2.25% duty on the sale of investment properties (paid by vendors to the Government – calculated as a percentage of the total sale price) stalled the sale of investment property in the State and made purchasing investment property look very unattractive.
Thankfully common sense prevailed and the duty was removed. New South Wales lost hundreds of millions of dollars to States like Queensland as investors chose to purchase elsewhere. South East Queensland did very well out of what can only be described a shocking decision. So what would happen if New South Wales slashed the stamp duty paid by purchasers? Would we see huge amounts of investment coming into the State from Queensland, Victoria and other States?
It’s an interesting question and one I’d like to see debated as increased taxes, tolls or duties is not the way to stimulate the economy. New South Wales is a wonderful part of our country and Sydney is one of the most beautiful cities in world – if only we had a State Government to match.
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