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Australia: New South Wales to index stamp tax (duty) brackets

Australia: NSW to index stamp tax (duty) brackets

The New South Wales (NSW) government announced plans to index the stamp tax (duty) brackets to the consumer price index (CPI) for residential property transactions.

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NSW would be the first state or territory in Australia to make this type of change. Currently, the measure is seen as being relatively modest because of the current low rate of inflation, and therefore a low rate of indexation. The proposal also does not address “bracket creep” for transactions involving commercial real estate or land.

Currently in NSW, stamp tax (duty) is paid on the dutiable value of the property across seven brackets, ranging from 1.5% on a value less than $14,000* up to 7% for a property value exceeding $3 million. 

The rise in housing prices has meant purchasers are paying significantly more in stamp tax now than they were in 2002, with the average rate of tax being paid increasing from 3.3% to 4.05% over the last 15 years. According to the NSW government, if the stamp tax (duty) had been indexed to CPI in 2002, purchasers of a $500,000 house today would be paying approximately $2,000 less.  

The reforms to NSW stamp tax (duty) are to be effective for transactions on or after 1 July 2019.

*$=Australian dollar

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