NSW Property Tax Reform Proposal Released: BDO Comments

NSW Property Tax Reform Proposal Released: BDO Comments

BDO Australia has welcomed the release of the New South Wales (NSW) State Government’s Property Tax Proposal Progress Paper which outlines plans for reform.

The government is proposing to replace stamp duty with a small annual tax which would lower the up-front cost for all home buyers, not just first home buyers.

BDO Sydney Tax Partner, Fady Abi Abdallah commented on the proposal and said that a new property tax system was well overdue.

“Stamp Duty was introduced to NSW in 1865 and it’s showing its age as an outdated tax which has stifled the property market in the last few decades,” Fady said.

“While we welcome stamp duty reform it is important to ensure that such reform achieves the desired outcomes. Removing it could be a catalyst for movement in the market, resulting in increased supply levels which would help with momentum.

“However there are concerns as to whether the proposed measures will result in increased affordability, particularly in the short to medium term. This is a risk that the reforms could well result in an increase in house prices thereby reducing affordability.

“The challenge for any Government is to balance the reform measures with the impact on housing affordability and Government revenue in the short term.”