In announcing its budget today, the New South Wales government has followed other jurisdictions in blaming a decrease in revenue and the uncertain economic environment for the deferral of a number of duties that were due to be abolished in New South Wales from 1 July 2012.
It was only recently that the abolition of duty on non-land assets was deferred indefinitely in Queensland, the Northern Territory and South Australia. South Australia also announced that stamp duty on marketable securities would remain indefinitely.
In the New South Wales Budget handed down today, it was announced that the abolition of duty on non-land business assets, marketable securities and mortgages would be delayed in New South Wales until 1 July 2013. This does not follow the indefinite deferral in the jurisdictions noted above. However, this does not prevent a further deferral in 12 months’ time if the State’s finances do not improve.
The announcement is especially bad news for borrowers (other than private individuals) giving security over New South Wales property because New South Wales is the only remaining jurisdiction in Australia to charge duty on mortgages/charges and it was widely anticipated that mortgage duty would be abolished as scheduled.
The deferral in the abolition of transfer duties may be alleviated for intra-group transactions with the introduction from 1 July 2012 of a broader exemption for corporate reconstructions. See previous Corrs In Brief.
On a positive note, the following measures have been announced for home owners:
- increasing the First Home Owner’s Grant to $15,000 from 1 October 2012 ($10,000 from 1 January 2014) for purchases of new properties up to $650,000. Note that from 1 October 2012, the Grant will be restricted to buyers of newly built homes;
- increasing the first homebuyer transfer duty exemption by $50,000 to properties up to $650,000. The exemption will be reduced on property values of $550,000 or more;
- introducing a New Home Grant of $5,000 to all non-first homebuyers of new properties up to $650,000, and vacant land up to $450,000 from 1 July 2012.
The above is intended to boost the weak property market. This should be good news for developers.