Upcoming Mallesons seminarsAll NSW businesses - particularly real property owners and persons acquiring land holding entities.
What do you need to do?Review the changes made by the Budget and determine whether they affect you.
Richard Snowden
Partner
Richard Snowden
Partner
T +61 2 9296 2193
Peter Green
Partner
T +61 2 9296 2389
Sydney
Peter Green
Melbourne
Frank Brody
Peter Fogarty
The Treasurer, the Hon. Eric Roozendaal MLC, has delivered the 2008-09 NSW Mini-Budget to the NSW Parliament today. The Budget seeks to support the State's tax revenue base by deferring some of the state taxes that were shortly due to be abolished and increasing the rate of land tax on certain premium properties.
Land tax
The rate of land tax has been increased effective from the 2009 land tax year (31 December 2008). A new premium land tax marginal rate of 2 per cent will apply to tax payers with total taxable land holdings above $2.25 million. The land holding below the premium threshold remains subject to the 1.6 per cent rate and will receive the 2009 tax free threshold of $368,000. It is intended that the premium threshold will be indexed for 2010 and the following years.
Deferred abolition of marketable securities duty, mortgage duty and transfer duty
Prior to the Budget, duty on unquoted marketable securities was scheduled to be abolished from 1 January 2009, mortgage duty on business loans was scheduled to be abolished on 1 July 2009 and transfer duty on non-land business assets was scheduled to be abolished on 1 January 2011.
The abolition of marketable securities duty on unquoted marketable securities has now been deferred until 1 July 2012.
Mortgage duty on owner occupied housing and investment housing has been abolished, however the remaining mortgage duty has been deferred until 1 July 2012.
The abolition of transfer duty on non-land business assets has been deferred until 1 July 2012.
Landholder duty
It is proposed that the taxation of land rich acquisitions will move from ‘land rich’ to a ‘landholder’ basis effective from 1 July 2009. ‘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. Under the proposed ‘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, and as such the 60 per cent test is eliminated.
Parking space levy
From 1 July 2009 the parking space levy will increase for certain areas around Sydney.
Nominal duties
Nominal duty on documents (eg duplicates) of either $2 or $10 will rise from 1 January 2009 to $10 or $50. The duty on the execution of certain trust documents will also be increased from $200 to $500 from the same date.
Petrol subsidies
The petrol subsidy to retailers in certain NSW regions is being reviewed (following on from the Queensland proposed restructure) and may be removed.
First Home Owner Grant
Effective from 11 November 2008, a NSW New Home Buyers Supplement of $3,000 will be added to the existing $7,000 grant for eligible First Home Owner Grant applicants building a new home or buying a newly constructed home in addition to the $14,000 provided under the Commonwealth’s First Home Owner Boost scheme. From 1 July 2009 (subject to Federal Government approval), the First Home Owner Grant and NSW New Home Buyers Supplement will be capped and only be available for properties valued up to $750,000.
Rates to increase on city toll roads
Tolls for the Sydney Harbour Bridge and Sydney Harbour Tunnel will be based on a peak and off peak rate ranging between $2.50 and $4.00.