2023 Policy Initiative - Stamp Duty Reform

Stamp duty reform - a fair and equitable transition from stamp duty to land tax.

Stamp duty is an inefficient and unproductive tax, and is contributing to the housing affordability crisis in NSW. From a government revenue perspective, stamp duty is also a ‘bumpy’ and less predictable tax source. For these reasons, the Greens support the abolition of stamp duty on housing and replacing it with a broad-based, equitable and progressive land tax.

Both the Liberal-National Coalition and the Labor party have put forward proposals for tinkering around the edges of state housing taxes, but neither have proposed a long-term vision that acknowledges the need to replace stamp duty with a more stable revenue source while also encouraging the more efficient use of housing. The major parties have failed to provide certainty for the housing market and both are targeting first home buyers only.

The Labor-Greens Government in the ACT is the only government so far in Australia to successfully transition from stamp duty to land tax. The Greens in government in the ACT have helped to ensure that the transition was well-planned and well-communicated, providing certainty to individuals as well as the housing market as a whole. Not only can we do a similar thing in NSW, having seen the progress of the transition in the ACT, we can even improve on it.

The Greens will replace stamp duty with progressive land tax over a 20-year period, allowing buyers to carry forward the stamp duty they have paid in the past as a credit for land tax on their new house.

THE GREENS WILL:

Scrap stamp duty on all new purchases of owner-occupied homes and replace it with an annual land tax, the percentage charged increasing progressively according to the value of the home
Provide for stamp duty amounts paid on previous owner-occupied homes to be indexed to their present-day value and carried forward as a credit against land tax incurred on new homes. Only once the stamp duty credit is exhausted will a person be required to pay land tax.
Allow those unable to pay land tax to instead defer it and either pay it later or accrue the debt as a first charge on their property on sale.
Cease stamp duty carry-over arrangements for all properties purchased after 2043 (or 20 years following the implementation of the reform).
[Scrap land tax exemptions for churches]

A recent report from the Sydney Morning Herald highlighted the 10 most expensive houses in Sydney - we must tackle this extreme wealth inequality when it comes to housing in NSW.

INCREASE AND EXPAND THE PREMIUM LAND TAX THRESHOLD FOR HIGH VALUE INVESTMENTS AND INVESTORS WITH LARGE PORTFOLIOS

Increase the land tax payable on non owner-occupied properties and land that meets the NSW government’s eligibility criteria and is above the premium threshold to 5% and include investment portfolios of more than 8 residential properties

We will apply a fair tax to wealthy non owner-occupied property owners and developers.

The percentage of land tax payable on the land value of non-owner occupied land and property that is over the NSW Government’s premium threshold land value of $5.925 million is 2% plus $67,364. We are proposing to raise the land tax payable on these properties to 5%.

Additionally we will apply this 5% tax on non-owner occupied residential investment portfolios of 8 or more properties where the total value is over the Premium threshold.

Increase the land tax payable to 5% on eligible properties above the Premium threshold
Levy a land tax of 5% on the total value of non-owner residential properties where 8 or more are owned by the same person and the land value exceeds the Premium Threshold.

ABOLISH ‘BUILD TO RENT’ HANDOUTS TO DEVELOPERS

Abolish the build-to-rent 50% land tax concession unless these developments yield at least 30% ongoing social and affordable housing on private land and 100% on publicly owned land

Build-to-rent is a form of development that has been given special treatment and tax concessions by the NSW government including a 50% land tax discount despite the fact that there are no affordable housing quotas for any of these developments.

We will abolish the 50% land tax discount on any new build-to-rent dwellings on private land unless at least 30% are affordable
We will abolish the 50% land tax discount on any new build-to-rent dwellings on public lands unless 100% are affordable

We can use our tax system to make more affordable homes available for those who desperately need them.

DEFERRALS AND EXEMPTIONS

Permit land tax deferrals based on hardship for owner-occupied residential properties and maintain exemptions on primary production lands and review other exemptions

This extreme wealth land tax will not negatively impact people who are unable to pay the tax due to hardship eg: retirees who are receiving a pension or have income that is insufficient to pay land tax. They will be able to defer the tax payment.

In line with Section 10AA of the Land Tax Management Act 1956 (LTMA) land that is used for the dominant purpose of primary production will continue to be exempt.

We will review all other current land tax exemptions and concessions.

The Greens recognise that housing is a human right and are committed to working to ensure that everyone has a safe, secure, affordable place to call home.

FURTHER INFORMATION

GOVERNMENT FAILS TO DELIVER SOCIAL AND AFFORDABLE HOUSING

Since the release of the ‘Housing 2041: NSW Housing Strategy’ last year, the housing crisis has continued to get worse, with the NSW Liberal/National Government failing to deliver.

There is an extreme shortage of affordable rental properties with most renters now paying more than 30% of their income on rent which puts them in rental stress.
The total number of affordable homes delivered by the NSW government in the 2021/2022 Financial Year was just 3 (in the Wollongong LGA).
The NSW government only delivered 516 social housing dwellings in the 2021/2022 Financial Year and in the same period sold off 262 social and public housing dwellings which means the net total of new social and public homes in this 12 month period was 254.
There are over 100,000 people on the public housing waiting list who have been deemed eligible but are facing waiting times of up to 10 years, resulting in tens of thousands of people either struggling to pay rents they can’t afford, living in unacceptable situations and facing homelessness.
The number of unoccupied public housing dwellings in NSW as at Sept 5, 2022 was 3,161.

The NSW government does not keep any data on the make-up of affordable housing as a percentage of the total housing stock in NSW.