NSW Mini Budget - Property Duties

Mortgage Duty

In the 2007 NSW budget, mortgage duty was to be abolished in 3 stages.

• from 1 September 2007 - on mortgages for owner occupied housing (where the mortgagor is an individual).

• from 1 July 2008 – on mortgages that are made in connection with investment housing (private dwellings)

• the balance of mortgage duty was to be abolished from 1 July 2009

Under last nights mini budget this final piece was unwound – and mortgage duty now stays (including for term and development finance) until I July 2012.

Land tax

Effective from the 2009 land tax year a new premium land tax marginal rate of 2 per cent will apply to land tax payers with total taxable land holdings above $2.25 million. The land holding below the premium threshold will remain subject to the 1.6 per cent rate and receive the 2009 tax free threshold of $368,000. The premium threshold will be indexed for the 2010 and following tax years. The premium marginal rate does not apply to your principal place of residence or primary production land.

Landholder duty

'Land rich' duty is currently paid on the acquisition of a 'significant interest' of a private company, a private unit trust or wholesale trust, where more than 60 per cent of its property is land. The taxation will move from 'land rich' to a 'landholder' basis from 1 July 2009.

Under the 'landholder' model, the purchase of a 'significant parcel of shares or units' in any entity that owns land above a threshold value is subject to transfer duty as if there was a direct purchase of land. Under the landholder model the 60 per cent test is eliminated.

Parking space levy

From 1 July 2009 the levy will increase from $950 to $2,000 a year per off-street, non residential parking space in the Sydney, North Sydney and Milsons Point business districts and from $470 to $710 a year in the business areas of St Leonards, Chatswood, Parramatta and Bondi Junction.

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.