NSW Stamp Duty a foul and putrid mess
Barry O’Farrell was elected Premier of NSW in March this year. His first budget announced Tuesday raised a storm of protest – not over a realignment of government priorities to his conservative Coalition’s agenda, but on Stamp Duty.
The previous Keneally ALP government had exempted first home buyers (on houses up to $500,000), off-the-plan buyers and new-build buyers over 65 years from this vile and pernicious theft. This ‘concession’ was worth up to $29,450 on a $600,000 house – allegedly to stimulate new construction.
O’Farrell has narrowed the government’s ‘gift’ to FHB’s who buy newly built homes and lowered the ‘oldies’ new-build concession to 55 year olds, boosting state coffers by an estimated nett $1,049 million.
What a mess!
FHB’s are being ‘incentivised’ to choose new homes, most of which are on Sydney’s outskirts, an hour plus travel from jobs. Which FHB’s can afford shiny new homes? The affluent ones. Middle income couples are being stiffed – again.
The politico-construction complex is cheering like football supporters over a home-ground goal. They like a good McMansion on a greenfields site.
Mr Premier! Give it up! Stop this rubbish once and for all!
Abolish Stamp Duty. Instead, take your revenues in Land Value Tax. Remove the LVT primary residence concession – which provides a huge subsidy to homeowners on valuable land and skews investment decisions from capital creation to consumption.
This change would greatly benefit genuine builders. Abolishing Stamp Duty would increase the velocity of sales. And a universal LVT would be a prickling incentive to immediately put land to its best and highest use.
Mr Premier! The history books have a blank page ready to record your deeds. Be the great reformer, the tax cutter and the champion of enterprise: remove this dud tax and broaden the existing Land Tax. Use your resounding majority to steer through this reform and NSW will be safe for your party for decades!