12 May 2010
Only two days after imposing a record-high development levy, the NSW Government has today announced yet another property tax.
“This is the second new property tax from the NSW Government this week,” Mr Gadiel said.
“It follows the NSW Government’s decision on Monday to authorise a 4 per cent levy on development in Burwood the highest levy of its kind in Sydney.”
Mr Gadiel said the “ad valorem” levy was not a genuine user charge, as the costs of running the land titles office had little to do with the actual value of a transaction.
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.
“This is merely a disguised increase in the rate of stamp duty.
“It’s equivalent to a 4.5 per cent increase in the stamp duty.
“It’s simply another tax for businesses in NSW to bear.”
Mr Gadiel said the action by the state government to increase property transaction taxes flies in the face of last week’s Henry tax review.
The review described stamp duties on property transactions as “highly inefficient, distorting both residential and business use of property”.
It said that such taxes were “volatile and highly inefficient and should be replaced with a more efficient means of raising revenue”.
Mr Gadiel said the ink was barely dry on the Henry Tax Review’s report and the state government was already seeking to consign it to the dustbin.
“This is a very disappointing move by the state government.
“It again sends the message that anyone who invests in NSW will be subject to unpredictable and ever-changing imposts.”
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.
