In what became the centerpiece of the budget for New South Wales, the stamp duty fee will be removed for dwellings purchased off the plan worth up to $600,000. NSW statesman and Treasurer Eric Roozendaal commented that this new legislation will save a home buyer up to $22,490.
Roozendaal added that finances for a home construction project, most especially for residential investments like apartments, is hard to get and the removal of the stamp duty fee gives borrowers a chance to buy early and to increase their chances of securing a home. A 25 per cent stamp duty discount will apply to homes under construction or newly-completed worth up to $600,000.
Stamp duty will be abolished for the next two years for over 65’s who sell their home to move to a newly built dwelling up to $600,000. This was done to encourage the said age group to move to smaller homes.
During its two-year run, the removal of the stamp duty will cost the NSW government around $184 million. Also, the stamp duty discounts will be mixed with a cap on council taxes to speed up the process in applying for projects for developing properties.
Meanwhile, the New South Wales government also reported that their state budget is back in surplus a year early than projected. During the half-year review of the NSW Treasury on December 2009, they have predicted that the state budget will regain surplus in 2010-11. However, the current state budget reflects a $101 million surplus during the current financial year.
Despite the fact that this budget surplus might be affected by the worsening debt crisis in Europe, the NSW government has projected an even larger surplus of $773 million during the 2010-2011 financial year. Majority of this budget surplus came from the drop in tax revenue from the global financial crisis.
The tax revenue cut was originally projected at $10 billion over the next four years but its current rate is about 50 percent lower. Also, a lower than expected unemployment rate gave a boost to payroll tax collection. For the coming financial year, the NSW government is seeing an unemployment rate of only 5.5 percent.
Due to these factors, the New South Wales government will push through with a payroll tax cut on the 1st of July, 2010. Another payroll tax cut is imminent on the first day of the year 2011 and this would bring down the payroll tax to 5.45 percent.
