Yesterday’s NSW state budget has forecast an easing in residential transfer duty growth, having grown an estimated 20 per cent in the current financial year.
Helping to notch up a record $2.1 billion surplus was soaring stamp duty revenues from the booming Sydney property market, which contributed an additional $1.2 billion to what was forecast in December’s half-yearly review.
However the government is banking on revenue growth to nearly halve in 2015/2016 to 11.8 per cent. That is down from an estimated 20 per cent in the current financial year, and well below the peak of 2013/2014, when these tax revenues surged ahead by 39 per cent.
Budget papers note that the recent moves by APRA to restrict investor lending growth are expected to impact future tax revenues, although continued strong population growth from oversees and workers returning from the once booming mining states is expected to temper any slowdown.
Malcolm Gunning, president of the Real Estate Institute of NSW, was “disappointed” with the Budget, arguing that with a record $7.29 billion in stamp duty taxes paid into its coffers, the government could afford to be more generous to property buyers, particularly first-timers.
“The NSW government has also chosen to ignore the stamp duty bracket creep, which adds thousands of dollars to property transactions, and is misguided in its view that a reduction in stamp duty rates, left untouched in 30 years, would fuel the affordability crisis that is currently being faced in Sydney,” Mr Gunning said.
Instead, NSW Treasurer Gladys Berejiklian plans to inject an additional $400 million into the Housing Acceleration Fund, taking the bulk of its $641 million funding allocation for social and affordable housing projects across the state.
The government continues to point to a chronic housing shortage in Australia’s most populous state, pointing to the need for an additional 664,000 dwellings in greater Sydney alone by 2031.
Smaller broking firms and sole operators may however benefit from a new $2,000 grant for small businesses as part of a cash splash to boost jobs growth.
A new Small Business Employment Incentive Scheme was announced as part of the budget, which will see small businesses that don’t pay payroll tax become eligible for a grant of up to $2,000 for each new employee they take on.
The measure will take effect from the new financial year on 1 July and continue through to the 2018/2019 financial year, at a total cost of $27 million.
[Related: Govt cashes in on 'surging stamp duty']
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