It's no surprise that the NSW government has benefitted from the much talked about flurry of property transactions in Sydney. Today we found out to what extent. The budgeted $6 Billion in revenue from stamp duty was achieved with 2 months still remaining in the financial year.
With no change in NSW stamp duty rates for 31 years, it's going to be a tough ask of the Treasurer to think about broader tax reform that would seek to remove this revenue stream that represents 28% of the state revenue collections.
It was pleasing to see that a portion of the 'super profits' from stamp duty will be contributed to a Housing Acceleration Fund to assist with addressing affordability with the balance going to the Restart NSW infrastructure fund.
The booming Sydney property market secured a record $7.29 billion revenue in stamp duty, up from $6 billion in 2013-14. Revenue is tipped to rise to $7.8 billion for 2015-16 and $8.6 billion in 2018-19. Turbocharging Treasurer Gladys Berejiklian's first state budget, the tally, which includes residential and commercial property transactions, is $1.29 billion higher than forecast. But the budget papers indicated residential stamp duty growth was expected to moderate to 11.8% in 2015-16 following growth rates of 21% in 2012-13; 39% in 2013-14 and an estimated 20% spurt in 2014-15. "Transfer duty is a large and highly cyclical revenue source which is inherently volatile and can be subject to sharp corrections. It noted a number of atypical factors had extended the current cycle including low interest rates, population growth and investor demand.