Sneaky new property tax in NSW: Libs

The NSW government has been accused of using the federal budget to sneak in a new
property tax that will add $200 to fees for an average Sydney house purchase.
Under the changes, quietly announced by Lands Minister Tony Kelly in state
parliament on Wednesday, new ad valorem fees of 0.2 per cent will be charged for
properties worth between $500,000 and $1 million.
A 0.25 per cent fee would be charged for properties valued above $1 million.
However, the first $500,000 will be fee-free, making the payment on an average
Sydney house of $600,000 about $200.
Mr Kelly says the new fees are part of strategy to prevent property fraud.
"The new security measures will strengthen land title examination processes and will
include an additional six authentication measures such as a new watermark and a
security trust seal tailored specifically for certificates of title," he said.
The opposition seized on the announcement, accusing the government of trying to
sneak in the new tax before the Penrith by-election next month.
"This is an attempt under the cover of a federal budget to get some bad news out
from the state budget, well away from polling day in Penrith," Opposition Leader
Barry O'Farrell said.
"This is a tax on homebuyers. This is a tax that is going to hurt the property market."
Shadow treasurer Mike Baird says claims the scheme will prevent property fraud are
"complete spin".
"Whatever way you dress this up, it is not Cinderella at the ball, it is an ugly,
dirty tax," he said.
"Whatever way they try to do it, it will not hide the fact that this is a tax on
homes. It's a stamp duty by any other name."
The property industry blasted the government for the tax, and the way it was
introduced, saying it would discourage housing activity in NSW.
"It's sending the wrong message for business," the Urban Taskforce's Aaron Gadiel said.
"Effectively this is just another stamp duty increase.
"This new impost today is equivalent to a 4.5 per cent increase in stamp duty on
larger transactions."
Mr Gadiel questioned why there was a sliding scale for fees, when land transfer
costs were unaffected by property values.
"The cost of processing a land title is the same whether the land transaction is
$100,000 or $700,000," he said.
"The idea that you would have a percentage fee suggests that it's really a
revenue-raising measure."
Glenn Byres from the Property Council of Australia said industry had not been
consulted about the fees.
He urged the government to rethink the tax, which will raise an estimated $90
million annually.
"The cost of this new tax for a standard home in Sydney would be an extra $200," Mr
Byres said.
"For a home of $1 million ... it's around $1000. For a large standard commercial CBD
block of around $200 million you are talking about a new tax of half a million
dollars."
Premier Kristina Keneally defended the new tax in question time, saying "70 per cent
of property registrations will remain unaffected by the ad valorem charges".
"Western Australia, Victoria, Queensland and South Australia all have ad valorem
fees on transfers," she said.
"The proposed ad valorem rates maintain NSW as middle ranking in government land
transfer charges."
If passed by parliament, the new charges would come into effect in July.



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