Analysis of Major Stamp Duty Changes Following the Release of Each Australian State's Budget
New South Wales (Draft Proposal)
On 17 November, the NSW budget proposal put forward a stamp duty reform: giving buyers a choice between paying a large one-off stamp duty, or paying a smaller annual property tax. Once a buyer elects to pay the annual property tax, the property will then be subject to this arrangement permanently.
Under the current property tax formula, buyers who choose the property tax must pay each year, after purchasing the property, 0.3% of the land value plus a fixed rate of A$500. This means the one-off stamp duty a buyer pays is equivalent to paying 25–30 years of property tax in one go.
In short, this policy spreads the one-off stamp duty expense across future years, which significantly reduces the buyer's cash flow outlay.
Victoria
On 24 November, Victoria announced a new policy halving stamp duty, and the State Revenue Office website has recently updated more detailed policy rules.
Policy period: 25 November 2020 – 30 June 2021
Eligible property types: residential properties with a taxable value below A$1,000,000
Concession: where the above two conditions are met, purchasing a new home or an off-the-plan property attracts a 50% stamp duty reduction; purchasing an established home or vacant residential land attracts a 25% stamp duty reduction
Queensland
This time, the budget proposal announced by Queensland did not follow up with any stamp duty reform. However, Queensland's current stamp duty rates are far lower than those in NSW, and much the same as Victoria's, which is offering a limited-time concession. For overseas buyers, Queensland's rates are lower than both NSW and Victoria.
On 17 November, the NSW budget proposal put forward a stamp duty reform: giving buyers a choice between paying a large one-off stamp duty, or paying a smaller annual property tax. Once a buyer elects to pay the annual property tax, the property will then be subject to this arrangement permanently.
Under the current property tax formula, buyers who choose the property tax must pay each year, after purchasing the property, 0.3% of the land value plus a fixed rate of A$500. This means the one-off stamp duty a buyer pays is equivalent to paying 25–30 years of property tax in one go.
In short, this policy spreads the one-off stamp duty expense across future years, which significantly reduces the buyer's cash flow outlay.
Victoria
On 24 November, Victoria announced a new policy halving stamp duty, and the State Revenue Office website has recently updated more detailed policy rules.
Policy period: 25 November 2020 – 30 June 2021
Eligible property types: residential properties with a taxable value below A$1,000,000
Concession: where the above two conditions are met, purchasing a new home or an off-the-plan property attracts a 50% stamp duty reduction; purchasing an established home or vacant residential land attracts a 25% stamp duty reduction
Queensland
This time, the budget proposal announced by Queensland did not follow up with any stamp duty reform. However, Queensland's current stamp duty rates are far lower than those in NSW, and much the same as Victoria's, which is offering a limited-time concession. For overseas buyers, Queensland's rates are lower than both NSW and Victoria.