- Follows a consultation paper released last year
- NSW Property Council said the reform model had many strengths
- Details confirming opt-in thresholds are set to be discussed in the near future
The Property Council of Australia (PCA) announced late last week it has welcomed the NSW Government’s progress report on proposals to reform the tax system.
The report comes as the ‘Buying In NSW, Building a Future’ consultation paper was released late last year after pressure from many stakeholders who argue property taxes – most notably stamp duty – is inefficient.
“We all know that stamp duty is an incredibly harmful tax, but tax reform is complex, so it is pleasing to see the Government clarify parts of the plan in today’s Progress Paper,” Property Council NSW Executive Director, Jane Fitzgerald said.
Ms Fitzgerald congratulated NSW Treasurer Dominic Perrottet on his “personal commitment” to bringing forward the reform agenda in the midst of the pandemic while emphasising the reform model proposed had many strengths.
“The opportunity to remove the stamp duty blight from the NSW tax landscape should be seized, but not at any cost, so it is vital that the final proposal works for both commercial and residential property.
“Today’s Progress Report confirms some important fundamentals such as full choice for purchasers and also addresses some important matters of concern for commercial and residential property investors.”
Jane Fitzgerald, Property Council NSW
The Progress Paper also included proposed new rates for property taxes; the threshold for residential owner-occupiers will be lowered while residential investors will be subject to a rate of 0.1% higher. Landowners whose holdings are valued above $1.5 million (unimproved) will now encounter a 0.3% surcharge.
“The higher the reform model pushes tax rates on commercial properties, the less likely they will be to opt into this new system and the opportunity to deliver the broadest reform dividend will have been missed. Getting this balance right is a critical next step,” Ms Fitzgerald added.
Another matter yet to be discussed will be the opt-in thresholds for the purchasers, which is set to be outlined in the near future.
Concluding her remarks, Ms Fitzgerald added she was pleased that feedback from the industry, such as pass-through rules for commercial property and concessional rates for charities and retirement villages, had been taken on board.
“The Property Council looks forward to continuing working closely with the NSW Government on this initiative and appreciates the government’s commitment to strong consultation with the industry and community on this very important reform.”
Along with tax reform, the Property Council have called for planning reform, amid forecasts suggesting an additional 1.7 million houses will need to be built within the next 40 years.
