One of those things that make us all go Hmmmm is Stamp Duty. Particularly the duty that is levied on residential property.
Our transfer stamp duty is based upon a progressive tax system where less expensive properties incur a lower rate of tax and more expensive properties incur a higher rate of tax.
Most Australians would say that this system is reasonably fair.
However, as house prices continue to climb, average people that want to buy average homes are being pushed into higher taxation brackets that were originally designed to tax the wealthy.
The common term used to describe this situation is bracket creep.
The rising value of property in our state is currently proving to be a bonanza for the NSW government as bracket creep kicks into high gear.
Here are some numbers that will generate plenty of Hmmmmms all over NSW:
1. The average amount of stamp duty paid by each residential property buyer over the 2012/13 financial year was $20,647. Compare this to the average in 2005/06 of just $14,471. An increase of $6,175 per property in 7 years. Hmmmm.
2. The NSW government pocketed an additional $577,580,193 in residential property stamp duty this financial year compared to last financial year. This is well over half a billion more than the year before. Hmmmm.
3. 10% more properties were sold in the 2012/13 year compared to 2011/12, however stamp duty collections grew by 17%. Hmmmm.
We think it is time for a review of the Stamp Duty thresholds.
As all of the economists keep telling us, the housing industry (particularly in NSW) must take up the slack being left behind by the receding mining boom. What better way to get things moving than by modifying this tax system to better suit the average person.