The NSW Treasurer, Eric Roozendahl yesterday released a mini-budget in which the State's budget position has moved from a projected surplus of $700 million at the time of the 07/08 Budget to a $917 million deficit disclosed in the mini-budget.

Cost cutting and deferral of expenditure as well as revenue raising measures were broad and affected almost all portfolio areas. Among the changes announced in the mini-budget affecting the property sector are:

Land tax - A marginal rate of 2 per cent will be introduced from the 2009 land tax year for taxpayers with total taxable land holdings exceeding $2.25 million. Land holdings below this amount will remain subject to the 1.6 per cent rate. The marginal rate threshold will be indexed each year. The existing land tax exemptions for principal places of residence and rural properties will remain intact.

Stamp duty - The current 'land-rich' model for imposing duty on the acquisition of a significant interest in an entity requires the entity to hold land with a value of more than $2 million representing more than 60 per cent of the net value of the entity. From 1 July 2009, this will be replaced with a "land-holder" model, which does away with the proportional test. This is in line with current practice in WA, ACT and the NT.

The abolition of stamp duty on mortgages for business loans, transfer of unquoted securities and non-land business assets has been deferred until 1 July 2012.

Parking space levies - Parking space levies in the Sydney CBD, North Sydney and Milsons Point areas will increase from $950 to $2,000p.a. From 1 July 2009. In the St Leonards, Chatswood, Parramatta and Bondi Junction business areas, the levy will increase from $470 to $710p.a.

Other changes/announcements

  • For a period of one year commencing on 11 November 2008 grants under the First Home Owners Scheme ('FHOS') will be increased by $3,000.
  • FHOS grants only available for property purchases less than $750,000 from 1 July 2009.
  • Review of developer contributions to take place in first half of 2009.
  • Sale (under 99-year leases) of Australian Technology Park and Sydney Harbour Foreshore Authority commercial assets and sale of surplus lands of other departments.
  • Property transfer fee at the Land Titles Office to increase from $92 to $184 per transaction

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.