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NSW government collects a record $7.3 billion in Stamp Duty in only one year; NSW government under pressure to address housing affordability crisis as it cashes in on rampant property market
Topic Started: 15 Jun 2015, 06:41 PM (3,040 Views)
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Stamp duty: Baird government raises $5 billion as housing affordability crisis escalates

June 13, 2015 , Sean Nicholls

The NSW government is under pressure to address the Sydney housing affordability crisis as it cashes in on a rampant property market with record residential stamp duty receipts of more than $5 billion.

The latest figures from the Office of State Revenue show that in May the government raked in $518 million from residential transactions to bring the total so far for 2014-15 to $5.1 billion.

This is the first time the figure has exceeded $5 billion and easily beats the 2013-14 figure of $4.7 billion with a month remaining.

On Friday, Premier Mike Baird said increasing housing supply was "the most effective action state and local governments can take to put downward pressure on house prices".

"We have increased housing supply to the highest levels in two decades – and, just as important, supplied the vital infrastructure needed to support new housing," Mr Baird said.

A spokesman said in the year to April, there were 55,666 dwellings approved in NSW - the strongest result since May 1995.

But Bill Randolph, director of the City Futures research centre at the University of NSW, said increasing supply was not the answer.

"House prices are determined in the market as a whole and new housing is only about 2 per cent additions per year," Professor Randolph said.

"So you would need to flood the market with new supply to do anything about house prices."

"There's been several authoritative reports internationally that show there's no clear supply side mechanism by which you could produce enough to reduce house prices significantly," he said.

Professor Randolph suggested "a logical state government" would abolish stamp duty and introduce a new system of property taxation.

An annual levy based on the value of a property would be "a more equitable alternative to charging people to buy".

Read more: http://www.smh.com.au/nsw/stamp-duty-baird-government-raises-5-billion-as-housing-affordability-crisis-escalates-20150612-ghm6hd.html
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Scrap stamp duty? Yes, then tax the family home

June 15, 2015 - 4:54PM , Michael Pascoe

You can't blame a lobby group for seizing the media moment to relaunch existing policy, as the Property Council of Australia has with its call to scrap stamp duty and replace it with bigger and bolder GST.

But you also shouldn't be surprised to find that a lobby group will prioritise its own interests at the expense of better policy.

The council is right to want stamp duty on real estate ditched. Henry wrote the book on it (well, a chapter any way) and there is close to universal agreement that stamp duty is a bad, inequitable, economically damaging tax. It's too bad that state governments are addicted to it and politicians of all colours lack the integrity to face up to the necessary reform.

As the council's submission to the Tax Discussion Paper states:

"The Federal Treasury identifies conveyancing stamp duty as the tax with the highest cost to living standards and economic growth'. Stamp duty distorts business decisions, locks families out of housing choices, worsens housing affordability, suppresses economic activity and leaves governments with highly volatile revenue streams."

Where the Property Council loses some credibility, though, is in its preferred alternative of recouping the stamp duty billions by increasing GST.

A better, broader GST is part of our future, but not as a stamp duty replacement.

That role fits much more neatly with a broad, no-exemptions land tax. Yes, folks, we should indeed be taxing the sacred family home, along with less-sacred churches and schools and every other user of land – which is why almost all our politicians run and hide at the suggestion.

While the Property Council prefers and recommends GST, its submission says it is "open to working with governments" on the broad land tax alternative.

Tax is something every industry and individual would like everyone else to pay.

It's an easy thing to grab a headline involving housing affordability and a big fat tax in the present climate, but it's hard work communicating the need for a change that some people won't like.

Henry again is the go-to authority. The great thing about "land", in its broadest definition, is that it can't run away, turn itself into a double-Dutch-Irish sandwich, hide in the Caymans, or sink to the bottom of the harbour. No matter how creative your accountant, a good land tax will be paid. It is quite easy and efficient.

And moving from stamp duty to a comprehensive land tax encourages more efficient use of land. Among other things, it discourages land banking and makes greater mobility possible. It's more equitable because the cost of government services is borne by society as a whole rather than just those who move house or business. It makes it easier for would-be downsizers to downsize, for workers to move in search of work and to escape the neighbour from hell.

A secondary positive is that it enables government to capture some of the value-add from investing in infrastructure. Put in a new train line, property values rise, the government gets a reward.

Read more: http://www.smh.com.au/business/the-economy/scrap-stamp-duty-yes-then-tax-the-family-home-20150615-gho0gt.html
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Gossamer
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That is why governments will never slay the golden goose regardless be they Labor or Liberal.
Common sense is a curse - those who have it need to suffer dealing with those who don't have it.

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Shadow
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NSW government collects a record $5.1 billion in Stamp Duty in only eleven months

NSW government under pressure to address housing affordability crisis as it cashes in on rampant property market
That's a nice war chest with which to deliver super-duper new First Home Buyer Grants, when the time is right.

I think a good time would be after the construction boom creates an oversupply, and they need lots of fresh new FHBs to dive in and soak up the glut.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Terry
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Good work Sydney people. You are driving incomes, making people wealthy, and behaving like obedient, hard-working mules.
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NSW Budget 2015: Boom allows fast-tracking of infrastructure projects

June 23, 2015, Sean Nicholls

Treasurer Gladys Berejiklian has unveiled a string of healthy surpluses over the next four years, driven by an ongoing property market boom and strong economic growth.

Outlining her first budget on Tuesday, Ms Berejiklian also announced $590 million will be brought forward to kick start a range of infrastructure projects using windfall tax revenues.

The projects, including the Sydney Metro, Parramatta Light Rail bus rapid transit and roads projects, are contingent on the part-privatisation of the electricity network, which has yet to occur.

Ms Berejiklian said that as legislation for the transaction has passed the NSW parliament, the government was therefore confident the funds would be available.

The allocation will form part of the government's anticipated $20 billion infrastructure spend from the electricity privatisation.

The budget papers confirm a record $7.29 billion in stamp duty revenue will be poured into the state's coffers this financial year, 75 per cent of which is from residential transactions.

They forecast stamp duty revenue take will exceed $30 billion to 2018-19.

But despite the focus on the Sydney housing affordability crisis, the government has not announced any changes to stamp duty concessions.

Choosing instead to focus on increasing housing supply to drive down property prices, the budget directs an extra $400 million to the housing acceleration fund to fast track infrastructure for new housing.

As foreshadowed, Ms Berejiklian announced a record $2.1 billion surplus for the 2014-15 financial year.

The surpluses continue across the four years of the forward estimates to 2018-19.

Read more: http://www.smh.com.au/nsw/nsw-budget-2015-boom-allows-fasttracking-of-infrastructure-projects-20150623-ghu7jf
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More than 8000 Sydney apartment blocks flagged for demolition
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Shadow
16 Jun 2015, 12:57 AM
That's a nice war chest with which to deliver super-duper new First Home Buyer Grants, when the time is right.

I think a good time would be after the construction boom creates an oversupply, and they need lots of fresh new FHBs to dive in and soak up the glut.
You mean they cant afford it on their own and a few grand in this market will make any difference will it ?

Will they have jobs to pay for a 40 year mortgage as jobs are dissapearing fast. Youth unemployment at record levels, higher than the US or UK. Another new norm ?

You may have noticed the job loss thread.

This 5 billion is just borrowed debt with 40 year mortgages against it, thats just for one year.



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The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Terry
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14 Jul 2015, 09:14 AM
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Everyone gets rich with property. These stamp duties go to provide the necessary infrastructure and put food on the table for many. Everyone's playing their part.
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