13 May 2010
Yesterday the NSW Government announced its intention to amend the Real Property Act to introduce a new property tax.
The new “ad valorem” levy would be based on the transaction value of land transfers and be additional to the existing $190 fee payable at the Land Titles Office.
The fee will apply to 30 per cent of property transactions of $500,000 or more.
The levy will be imposed at a rate of 0.2 per cent for the portion of land transactions between $500,000 and $1 million, and 0.25 per cent for the value above $ 1 million. This is a $23,500 impost on the purchase of a $10 million development site and a $123,500 impost on a $50 million development site.
The Urban Taskforce has opposed this new tax. It is merely a disguised increase in the rate of stamp duty. For larger transactions its equivalent to a 4.5 per cent increase in the stamp duty liability.
The start-date of the new arrangements is not yet clear, although the government may intend that it start as early as 1 July. No text of any legislative proposal is currently available.
The Minister’s media release is here.