NSW property investors to pay $100 million more in land tax as values rise

The New South Wales budget surplus forecast has increased by $600 million.

The NSW Treasurer Dominic Perrottet advised the projection for the 2017/18 year was revised up to $3.3 billion, from $2.7 billion.

The state government’s half-yearly budget review also revealed the first home buyers assistance scheme would cost $461 million this financial year.

“A significant reduction in transfer duty is derived from our first home owners grants and the concessions and tax cuts that form part of that.”

However, an increase in land tax will help offset the loss the government makes from the first home buyer concessions.

Higher than expected property values has pushed up the land tax revenue forecast by more than $100 million.

Land tax receipts from owners of investment properties and holiday homes in NSW are forecast to be $867 million higher than expected over the next three years.

Mr Perrottet said he was confident the Sydney housing market would remain healthy.

“We see the property market remaining strong, we see completions continuing at record levels,” Mr Perrottet said.

Fairfax Media noted the forecast assumes that the average price of residential properties sold in 2017-18 will be around 1.8 per cent above the average price the previous year. 

Stamp duty revenue in the three years to 2020-21 has been revised down by $657 million, largely due to the take up of stamp duty concessions for first home buyers in a housing affordability package announced in the June budget.

Between June and November, 13,672 people have received stamp duty concessions, compared with 3970 people in the same five month period last year.