We all know how the Sydney property market has been performing, so it is no surprise to see the Government receive an additional $1 billion of stamp duty (+15 percent). The volatility of this amount is a one of the reasons why stamp duty is so often criticised as an ongoing source of state government revenue.
Given this extra revenue it is therefore also not surprising to see the New South Wales Treasurer announce that marketable securities duty, mortgage duty and business assets duty will be abolished. This is something that the various State and Territory governments proposed in 1999 to do as part of the Intergovernmental Agreement to introduce goods and services tax (GST). At one stage New South Wales even amended its law to abolish those duties: initially in 2009, which was then deferred to 2012 and further deferred to 2013. This latest budget announces that the duties will be abolished in 2016.
So, should we be planning those business purchases for 1 July 2016 and speaking with our banks about a refinancing package? Or will this date pass too, and the State need the extra money? As the only remaining state with mortgage duty and one of only 2 with marketable securities duty, and since they are together budgeted to raise only $209 million over the next year, we can only hope that this time they will actually go. Business assets duty is a little more complicated, so let’s wait and see.
After all, 2 years is a long time in politics.