By Terry Ryder, 20th June 2007
Mortgage duty will get the chop in New South Wales, with the State budget announcing mortgage duty for owner occupiers will be scrapped from 1 September 2007.
The cuts represent a saving of about $2,000 on a $500,000 house purchase. In an accelerated phase out by 2009, two years ahead of schedule, investors receive the benefit from 1 July 2008 and duty will be abolished on all commercial transactions from 1 July 2009.
In another property tax incentive, NSW land tax rates were reduced from 1.7% to 1.6%, a measure the Real Estate Institute of NSW (REINSW) says recognises the disincentives that had been driving property investors away to states with a more favourable tax regime.
REINSW President Cristine Castle says the reduction in land tax duty, while a small step, will improve the position of property investors in NSW and this should eventually assist the chronic undersupply of rental properties. Housing Industry Association Regional Executive Director NSW Graham Wolfe says the tax cuts will inject fresh confidence into the NSW residential housing sector.
Cuts to land tax and mortgage duty total $248 million in 2007-2008 and amount to $1.58 billion in the following three years.
The NSW government, which is responsible for public housing in Australia’s most expensive housing state, assists disadvantaged and lower income people renting in Sydney’s perilous private rental market. The budget provides $26.9 million to fund Rentstart, a program which gives assistance such as payment of rental bonds for private renters.
In all, $763.2 million was allocated to the Department of Housing. This includes $364 million to be spent on public and community housing (assisting with the start of new dwellings, the completion of dwellings under construction, the continuation of current leases and the addition of leases from the private market).
The Aboriginal Housing Office has been allocated $19.1 million and crisis accommodation gets $9.1 million.
NOTE: For details of the property highlights in the Budgets of other states and territories, refer our earlier article entitled "Some property tax relief in state Budgets" dated 15 June 2007.
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