Treasurer Dominic Perrottet handed down the New South Wales State budget on 17 November 2020. As with other States and Territories, most measures included the 2020-21 budget have already been announced as part of economic stimulus measures in response to the enduring COVID-19 crisis. Additional revenue measures included as part of this budget include:
- permanently increasing the payroll tax threshold from $1 million to $1.2 million from 1 July 2020;
- lowering the payroll tax rate from 5.45% to 4.85% from 1 July 2020 to 30 June 2022; and
- extending the land tax relief available for landlords who provide rent relief to retail tenants (with an annual turnover of up to $5 million) to the 2021 land tax year.
The budget has also laid the foundation for a proposed overhaul of stamp duty and land tax in New South Wales, opening up the topic for public consultation and feedback. At a high level, under the proposed regime, those buying property would be given the choice to either pay stamp duty up front, or pay a property tax calculated on unimproved land values each year the property is held (similar to council rates).
For those who have already purchased property in New South Wales, the Treasurer has said that there would be no double taxation, and residential owner-occupied property (eg. property currently eligible for primary residence exemptions and concessions) are expected to be taxed at a lower rate than investment residential property and commercial property. While the proposal as it stands is scant on detail, the overarching aim of the reform appears to cater for a more mobile and robust population, and to ultimately remove the stamp duty “handbrake” on economic growth. If this proposal goes ahead, large players in the property industry may need to look at their own budgets to find cover for additional ongoing expenses in New South Wales.
For more information, please see: https://www.treasury.nsw.gov.au/property-tax-proposal.