Stamp duty overhaul to give first home buyers a $1.9 billion leg up in Sydney's soaring property market - by DOUBLING taxes on foreign investors

The NSW Government is set to announce extra taxes for foreign property buyers International buyers will now pay 8% of the worth of the property in stamp duty  Annual land tax surcharge on foreign buyers is increasing from 0.75 to 2% a year The extra money is expected to fund help for NSW's struggling first-home buyers The changes will reportedly be implemented for buyers from July 1, 2017  By Ashleigh Davis For Daily Mail Australia Published: 02:06 +10:00, 1 June 2017 | Updated: 02:41 +10:00, 1 June 2017 e-mail 12 shares 19 View comments Foreign property buyers will soon be forced to pay more than double the current taxes when they purchase a property in New South Wales. The increase is part of a $1.9 billlion plan set to be announced by New South Wales premier Gladys Berejiklian on Thursday, reported the Daily Telegraph. The plan will see international buyers pay 8 per cent of property's worth in extra stamp duty charges, an increase from the current rate of 4 per cent. +5 Foreign property buyers will soon be forced to pay more than double the current taxes in stamp duty when they purchase a property in New South Wales (stock image) +5 The increase is part of a $1.9 billlion plan set to be announced by New South Wales premier Gladys Berejiklian (pictured) on Thursday The annual land tax surcharge for foreign buyers will also increase from 0.75 to 2 per cent a year. The extra money is expected to fund help for NSW's struggling first-home buyers.  RELATED ARTICLES Previous 1 Next 'I'm going to blow up this plane': Man 'claiming to have... 'If these people hadn't come here as refugees, the people... Share this article Share Increases to the stamp duty surcharge and the land tax surcharge are expected to raise $1.9 billion over the next four years.  Stamp duty charges on existing homes for first-home buyers were removed by former premier Mike Baird, but are now set to be reintroduced by the current state government.   +5 The plan will see international buyers pay 8 per cent of the worth of the property they purchase in extra stamp duty charges (stock image) The Foreign Investor Surcharge Duty (stamp duty surcharge), which will double to 8 per cent from July 1, 2017, is in addition to the transfer duty of up to 7 per cent that foreign investors already face. This means foreign buyers could soon face paying 14.5 per cent of the total purchase price of the most expensive properties in NSW.   The new measures are tougher than any other state in Australia, including Victoria which charges foreign buyers 7 per cent stamp duty and 1.5 per cent land tax.  The announcement compares with others in Hong Kong and Singapore, where governments charge 15 per cent stamp duties to foreign buyers. In the Canadian states of British Columbia and Ontario the governments have also implemented 15 per cent foreign buyer transfer taxes.   Read more: http://www.dailymail.co.uk/news/article-4559306/Plan-help-home-buyers-Sydney-massive-property-prices.html#ixzz4iozN0Kgx Follow us: @MailOnline on Twitter | DailyMail on Facebook ================================================ Stamp duty rip-off forcing sellers to stay put May 5, 201712:44pm Video Image Pause 0:02 / 1:23   Fullscreen Autoplay Adelaide's Afternoon Newsbyte 2 June 2017 0:53 12-year-old crowned U.S. Spelling Bee champion 1:26 Refugee a code word for Muslim: Prof Humphrey 6:25 No ugly ducklings here, just cute cygnets 0:35 PHILIPPINES: Emergency Services Respond to Scene of Manila Casino Attack June 02 1:03 Warriors crush Cavs in game 1 2:33 AU NSW: Icicles Form on Statue as Winter Rolls Into Northern Tablelands June 02 1:08 KD v Rihanna: The stare down 0:40 Julie Bishop is not Australia's "Floral Minister" 1:43 'Dozens dead' in failed Manila casino robbery 1:47 AUSTRALIA: Turnbull Confirms Commitment to Paris Climate Pact, Backbenchers Argue for Exit June 01 2:37 Macdonald jailed for at least seven years 3:57 'Dozens dead' in failed Manila casino robbery 0:32 Macdonald jailed for at least seven years 1:51 Family and supporters of murder victim Jody Meyers leave court 0:12 Police appeal for information over robbery at Kallangur 0:18 Swan Lake trailer final 3 1:05 Tourist shamed for being disrespectful to Queen's guard 0:30 Durant's easy dunk show 0:35 Adelaide's Lunchtime Newsbyte 2 June 2017 0:53 Treasurer talks housing affordability and the budget Frank Chung news.com.au @franks_chung Share on Facebook Share on Twitter Share on Google+ Share on Reddit Email a friend AUSTRALIA’S “worst tax” is stopping nearly half of potential sellers from listing their homes, driving up demand and impacting affordability, a new study suggests. The survey of 2700 of homeowners, commissioned by LJ Hooker, found 44 per cent of respondents who wanted to sell their home in 2016 but decided against it cited transactional costs such as stamp duty they would pay on their next property as the reason. Just over half said they would likely go to market if stamp duty were lessened, while 61 per cent would have gone to market if it were scrapped altogether. LJ Hooker said 60 per cent of survey respondents who requested an appraisal last year decided against selling. “Homeowners are staying in their properties for longer periods of time which is reducing the necessary turnover of stock,” said LJ Hooker network chief Graeme Hyde. “With an increasing and ageing population, it’s important all market demographics have the confidence to buy and sell in the marketplace to aid sustainability.” Soaring property prices, particularly in Sydney and Melbourne, have flooded the coffers of state governments with stamp duty receipts. Stamp duty generally accounts for around one quarter of all state government taxation revenue. “As stamp duty is pegged by the state governments to property prices, we’ve seen transactional costs rise exponentially,” said LJ Hooker head of research Matthew Tiller. “In Sydney, the sale of a median-priced property costs a buyer around $40,000. In Melbourne, the 5.3 per cent duty adds $37,520 for buyers.” CoreLogic figures showed an 8.9 per cent drop in listings and a 9.2 per cent drop in transactions in 2016. Transaction costs, including stamp duty, now account for up to 8 per cent of the value of the home, “reducing the incentive to buy and sell in the same market”, Citi wrote in a report this week. The Property Council, which has long advocated for a complete abolition of Australia’s “worst tax”, says stamp duty can add more than $60,000 to the cost of a typical Sydney home over the life of a mortgage when interest is taken into account. Earlier this year, Victoria announced it was scrapping stamp duty for first home buyers on homes valued up to $600,000. In NSW, where a similar exemption exists for new homes up to $550,000, Premier Gladys Berejiklian has conceded it must be explored for existing properties. Last year, a report by the McKell Institute think tank recommended scrapping stamp duty and moving to a “simpler, fairer” land tax system, which would remove upfront costs on purchasing a home and bring benefits in its own right. “A stable and simple form of revenue that cannot be avoided, land tax would improve housing affordability through incentivising a better allocation of housing, while also allowing for transport infrastructure to be financed through value capture financing,” the report said. frank.chung@news.com.au ============================= This is the sweet spot for first homebuyers in NSW wanting the best deal out of the new stamp duty cuts image: https://secure.gravatar.com/avatar/7f414d980ee914853d08c9068e951e9f?s=32&d=mm&r=g Chris Pash Jun 2, 2017 image: https://edge.alluremedia.com.au/uploads/businessinsider/2017/06/sydney-property.jpg William West/AFP/Getty Images New South Wales, in releasing a package of measures aimed at improving home affordability, has given first homebuyers a big hand in getting a start in property ownership. Stamp duty concessions now apply for those buying either a new and or existing home. All stamp duty for first homebuyers on new homes up to $650,000 has been abolished, a significant saving on the total cost of purchase. And stamp duty discounts apply after that, up to a limit of $800,000. The savings are smaller for existing dwellings, but are still significant. NSW also abolished stamp duty charged on lenders’ mortgage insurance, which is often required by banks to lend to first homebuyers with limited deposits. This would save about $2,900 on an $800,000 property. The changes start on July 1. Barton Deakin, a government relations consultancy aligned with the Liberal-National Coalition, produced this table showing the savings for both new and existing homes:    by Taboola  Sponsored Links  You May Like Best Dating Sites to Find Love in 2017 Top 10 Aussie Dating Sites The Secret You Need to Know About Ebooks The Book Insider image: https://edge.alluremedia.com.au/uploads/businessinsider/2017/06/barton-deakin-table-1.jpg The total saving is actually greater than the current normal stamp duty, according to Barton Deakin, which did the calculation using the total stamp duty exemptions plus first home owners grant and then added the savings from lenders’ mortgage insurance duty abolition. The sweet spot — the maximum saving — is for new homes costing $600,000, and for existing dwellings it’s $650,000, as this chart shows: image: https://edge.alluremedia.com.au/uploads/businessinsider/2017/06/nsw-stamp-duty-sweet-spot.jpg Image: Business Insider The stamp duty savings for a new home costing $600,000 is $34,361, compared to $24,361 for an existing dwelling. A $650,000 existing dwelling saves $26,857 in stamp duty, the same amount as a new home. And among the measures announced by the NSW government are increases in fees for foreign buyers, aimed at cutting demand for property. The foreign investor stamp duty surcharge will be doubled to 8% from 4% and that for land tax increased to 2% from 0.75%. Read more at https://www.businessinsider.com.au/chart-this-is-the-price-sweet-spot-for-nsw-first-homebuyers-under-the-new-stamp-duty-concessions-2017-6#wxWS2mGYCrM3mQvw.99 ====================== Victorian Government axes stamp duty for first homebuyers March 5, 20179:52am The Victorian Government will abolish stamp duty for first homebuyers. Julia Corderoy news.com.au Share on Facebook Share on Twitter Share on Google+ Share on Reddit Email a friend VICTORIA has thrown a lifeline to young people struggling to get on the property ladder by axing stamp duty for first homebuyers. From July, the controversial property tax will be abolished for any first homebuyer in Victoria whose property costs less than $600,000. There will also be discounts for properties worth between $600,000 and $750,000, regardless of whether they are new or existing. Premier Daniel Andrews will formally unveil the plan today, which is expected save 25,000 first homebuyers an extra $8000 a year, as a part of his government’s cost-of-living package. The announcement comes just days after the Andrews Government doubled the First Home Owner Grant in regional Victoria. Commencing 1 July 2017, the grant will increase from $10,000 to $20,000 and is expected to help 6000 first home buyers in regional Victoria to build and live in their own community. “By doubling this grant, we’re giving young people in regional Victoria even more reason to live locally,” Mr Andrews said. Victorian Premier Daniel Andrews.Source:AAP THE MOST HATED TAX Stamp duty has long been a source of contention with reform being a major priority for many in the property industry. The Real Estate Institute of Australia (REIA) called on the Commonwealth Government to abolish the much-hated tax for first homebuyers nationwide in its submission to the 2016-17 Budget. “We are also asking that the Federal Government take a leadership role in abolishing state-based stamp duties as analysis shows that economic activity in Australia can be lifted by just shifting the composition of taxes from high economic cost State taxes to Australia-wide taxes,” REIA President Neville Sanders said. And in its submission to the Victorian State Budget, the Real Estate Institute of Victoria (REIV) echoed these calls. “In its 2016-17 Federal Budget submission, the Real Estate Institute of Australia called for stamp duties to be abolished for first home buyers nationwide, requesting the Federal Government take a leadership role in this. Our position is consistent with this,” the submission stated. “Reducing stamp duty provides a more efficient outcome for both the buyer and the state, as it reduces the number of transactions and red tape created through the application process. “The REIV favours this method of assistance for first home buyers for two additional reasons: firstly, if the structure is based on a proportion of the tax paid, the benefit to the buyer is less likely to be diminished by increases in house prices; and, secondly, the assistance is the same for all first home buyers.”

Fears BHP Billiton, Rio Tinto shares will fall further as fund managers say no more money

Iron ore rally continues Iron ore had one of its best weeks of the year with prices up 13.5% during the week. Iron ore finished at US$57.81/t CFR China. The deferral of BHP’s Inner Harbour Debottlenecking project on Wednesday has seemed to boost sentiment around the commodity, sending signals that the Australian iron ore expansion may be slowing. Iron ore also rose on hopes of further stimulus in China and as iron ore port stocks in China fell 0.42Mt to 97.16Mt last week. The total number of drill rigs deployed onshore in the US fell from 954 to 932 last week. Rigs deployed in oil plays fell from 734 to 703, while rigs deployed in gas plays increased from 217 to 225. US oil rigs have now declined ~56% since reaching a peak in early October, as US oil producers respond to lower crude oil prices. WTI crude finished lower as US inventories continue to rise. Base metals posted strong gains on Friday as a string of weaker economic data sparked expectations of stimulus in China. Gold futures posted their largest losses in seven weeks as equity markets outperformed and as investors weighed on the likelihood of interest rate rises in the US. ================= Iron ore plunge stokes pressure for Australia rate cut Wed, Apr 01 21:56 PM EDT By James Regan and Wayne Cole SYDNEY, April 2 (Reuters) - Pressure is mounting for a cut in Australian interest rates as soon as next week as plunging prices for iron ore, the country's single most valuable export earner, punish both mining profits and government tax revenue. The Reserve Bank of Australia (RBA) holds its monthly policy meeting on April 7 and markets are wagering heavily it will follow up a February easing with another quarter point cut to an all-time low of 2.0 percent. In part any move would be aimed at lowering the Australian dollar, which would assist commodity producers exporting U.S. dollar-priced products. Westpac chief economist Bill Evans noted iron ore prices had fallen around 15 percent since the RBA's March policy meeting, while the local currency was only down a single U.S. cent. "That is why it will be important for the bank to maintain an easing bias when it announces the cut next week," said Evans. "It will maintain downward pressure on the AUD." Interbank futures <0#YIB:> imply a better than 60 percent probability of an April easing, and are fully priced for one by May. Indeed, investors are already wagering rates will fall to 1.75 percent before the year is out. RBA governor Glenn Stevens says Australia is struggling with the end of its mining boom, noting that past mining booms had almost all ended very badly for Australia, usually through runaway inflation followed by a major crash. But Stevens says the RBA will continue to support the economy. BLOW TO MINING PROFITS, TAX REVENUE Spot Iron ore .IO62-CNI=SI stood at $49 a tonne after plunging 3.9 percent on Wednesday - the weakest since the index was introduced in 2008 and could drop as low as $47, forecasts Westpac Bank. The decline had a deadening impact on mining shares with Fortescue Metals Group off 3 percent, while Atlas Iron fell 3.8 percent and BC Iron 4 percent. With little prospect of rising iron ore prices, as global supply continues to expand in the face of waning demand growth, miners are counting on lower oil prices, cheaper freight rates and a weaker Australian currency to turn a profit. Iron ore is Australia's single biggest export earner so the collapse in prices has been as big a blow to government tax revenues as to mining profits. A half-decade after insulating Australia from the worst of the global financial crisis, the giant mining state of Western Australia is being forced to defer iron ore royalties which underpin tens of thousands of jobs. Stephen Walters, chief economist at JPMorgan, cites estimates from Australia's Treasury that every $10 per tonne drop in the iron ore price cuts up to A$3 billion off the national budget. Iron ore prices have fallen 70 percent, putting the ultimate drag on revenue up to A$30 billion," said Walters." That has only intensified pressure on Treasurer Joe Hockey to come up with savings or tax raising measures in his annual budget due in May, while also ensuring that the drag does not harm an already sluggish economy. "With fiscal policy being tightened, the onus will be on monetary policy to provide the support the economy needs." (Editing by Michael Perry) ============ traditionally when you go into the bust type of the cycle it can last a long time," he said. by Kate Cowling Fund managers with large holdings of Australian resource companies aren't committing any more funds to the embattled sector, raising questions about whether share prices of our biggest miners including BHP and Rio Tinto have further to fall. Two staunch supporters of Australia's mining sector, Pengana Capital and Fidelity, are adopting a wait-and-see approach following comments from the Treasurer that iron ore could fall as low as $35 a tonne and a warning from global credit rating agency Standard & Poor's. Both Pengana Capital's senior fund manager Tim Schroeders and Fidelity portfolio manager Paul Taylor said they wouldn't be adding to existing holdings in BHP and Rio Tinto at current iron ore prices. Pengana manages around $2 billion mostly invested in Australian equities and includes BHP and Rio Tinto among its top five holdings. "We have enough," Pengana Capital's senior fund manager Tim Schroeders said. Fears BHP Billiton, Rio Tinto shares will fall further as fund managers say no more money Both Pengana Capital’s senior fund manager Tim Schroeders and Fidelity portfolio manager Paul Taylor said they wouldn’t be adding to existing holdings in BHP and Rio Tinto at current iron ore prices. Louie Douvis by Kate Cowling Fund managers with large holdings of Australian resource companies aren't committing any more funds to the embattled sector, raising questions about whether share prices of our biggest miners including BHP and Rio Tinto have further to fall. The prized commodity has lost more than half its value in a year, falling to a 10-year low of $US47.08 ($61.91) per tonne last week, as BHP and Rio Tinto hit the accelerator on iron production. Schroeders said he was watching for further price falls but had no immediate plans to buy. Fidelity portfolio manager Paul Taylor said his firm is currently slightly underweight to BHP and Rio Tinto combined, relative to their benchmarks. "It is a bit of an unusual period and we're happy with that positioning," he said. He said while Fidelity takes a long-term investment view and favours quality companies with low production costs, the price is worth keeping an eye on. "If the macro environment knocks really high quality companies around, often that's your opportunity," he said. "We think the right way to structure the portfolio is towards low-cost producers and away from high-cost producers" he said. "The low-cost producers in Australia are BHP and Rio. They are well positioned." The reluctance of traditional supporters of the sector to back the giants follows a horror week for the iron ore giants in which Treasurer Joe Hockey speculated that iron ore could fall as low as $35 a tonne. On Tuesday Standard & Poor's placed Australia's three biggest miners on negative credit watch and on Wednesday BHP shareholder Nikko Asset Management described the mining giant's progressive dividend policy as a "travesty" and a "bear trap". Nikko Asset Management's head of equities Brad Potter said his firm had a "very negative view" of iron ore. He said his pessimism was not a reaction to the recent price drops, but warning signs that started emerging 12-18 months ago. He said his primary hesitation with iron ore was how long the down part of the cycle will last. "The risk is traditionally when you go into the bust type of the cycle it can last a long time," he said. Share via Email Share on Google Plus Post on facebook wall Share on twitter Post to Linkedin Share on Reddit RELATED ARTICLES Fortescue continues high-speed cost cutting 0 min ago Iluka Resources reports slow start to the year Twiggy's fortune tipped to shrink BHP, Rio ore 'ripping heart out' of Australia: Fortescue BHP gets a zero-tax Singapore deal Contains:Infographics LATEST STORIES Fortescue Metals Group chief executive Nev Power says federal and state governments need to 'have a really hard look' at what is happening in the industry. Fortescue continues high-speed cost cutting 0 min ago Murray King Optus CFO commutes to work on his bike. Landlords wow cycling office workers Woolworths was quick to pull down its poorly thought out 'Fresh in our Memories' campaign, evoking Anzac images of a digger. Carrspace forced to protect staff from online abuse 50 min ago SUBSCRIBE LOGIN TOOLS Markets Data Australian Equities World Equities Commodities Currencies Derivatives Interest Rates Share Tables FAIRFAX BUSINESS MEDIA Asset The Australian Financial Review Magazine BOSS BRW Chanticleer Luxury Rear Window Smart Investor The Sophisticated Traveller CONTACT & FEEDBACK FAQ Contact us Letters to the Editor Give feedback Advertise Reprints & Permissions ABOUT About us Our Events Digital Subscription Terms Newspaper Subscription Terms Site Map CONNECT WITH US Post on facebook wall Share on twitter Post to Linkedin Share on Google Plus YOUR OPINION IS IMPORTANT TO US GIVE FEEDBACK CHOOSE YOUR READING EXPERIENCE View site with desktop experience View site with tablet experience View site with mobile experience © Copyright 2015 Fairfax Media Publications Pty Ltd Privacy Terms & Conditions of Use Feedback Form ========================================= Taxation, Business Costs and Red Tape 18 Aug 2013 •Which regulations are most difficult to comply with? • Which regulations are most costly to comply with? • What are the most problematic areas of your business relationship with the three tiers of government? Tell us your views. Your input is valuable to helping shape South Australia's Small and Family Business Strategy. 7 comments Anthony Kittel over 1 year ago The exemption of payroll tax on wages paid to apprentices and trainees assisted business to increase training and develop skilled staff. The incentive offset some of the hidden costs and risk in developing staff and hiring unskilled labour. This was a great initiative by Government and embraced by employers. Please consider the re-introduction of this incentive! Brett Mahoney over 1 year ago Payroll Tax Exemptions The introduction of the exemption of payroll tax on wages paid to apprentices and trainees in the 2011 State Budget was a very important initiative, however it is disappointing that it was removed the following year, particularly since it was removed without any consultation with the business community. Abolition of an important incentive for employers to recruit apprentices and trainees is far from being an ideal way to fill a Budget gap. Furthermore, it is likely to lead to reduced employment of apprentices and trainees and have a negative impact on levels of investment and economic activity. To ascertain the impact on the business community of the removal of the payroll tax exemption, a recent survey of South Australian businesses showed the following key results: Had the payroll tax exemption remained in place: – three quarters of businesses indicated they would have employed more apprentices, – two thirds of businesses indicated they would have employed more trainees. With the payroll tax exemption being removed: – three quarters of businesses indicated they would employ fewer apprentices, – 60 per cent of businesses indicated they would employ fewer trainees. − 80 per cent of businesses indicated that the removal of the exemption would hurt their profitability, − 60 per cent of businesses indicated that the removal of the exemption would negatively impact their investment levels. Brett Mahoney over 1 year ago Payroll Tax South Australia has the third lowest payroll tax rate in Australia, but the second lowest payroll tax free threshold. While the lower tax free threshold for payroll tax in South Australia means more businesses pay payroll tax in this State, the payroll tax system is relatively more efficient than other States, except Victoria. In addition, the relatively low rate of payroll tax results in medium sized and large businesses paying less payroll tax than their interstate counterparts on the same wages/salary bill. Raising the tax free threshold to $800,000 is the next step to reducing the payroll tax burden, followed by raising the threshold further and reducing the tax rate further once Budgetary circumstances allow. Brett Mahoney over 1 year ago South Australia should have the most competitive and efficient business tax system of all States and Territories in Australia. A low tax environment is vital for business to remain competitive, undertake investment, provide employment opportunities and facilitate a higher standard of living. Land Tax Further reforms are required to make the land tax regime more competitive: – reduce the maximum rate of land tax to 2.5 per cent, – increase the threshold level for this rate from $1.052 million to $2.7 million. These are the minimum first steps to achieving a more competitive land tax system. Further increases in land tax thresholds and cuts in land tax rates should be pursued as financial pressures on the South Australian Budget allow. In the absence of comprehensive national taxation reform this course of action continues to be recommended. Kelly Baker-Jamieson over 1 year ago As a South Australian small business with operations across multiple states, the costs of compliance are on the rise. Obvious examples are Workcover and Payroll Tax. I agree with the below comments highlighting the increasing costs of Workcover in SA and this needs urgent attention to ensure we can be as efficient as possible. Payroll tax compliance costs are also rising and our business was recently moved from annual to monthly contributions by the SA Government. Contributing monthly increases our administration costs vs a once off annual submission. It may seem small but when you multiple the effort across four different states (some monthly / some annual) it is a minefield of compliance to contend with. I would like to see the SA Government take the lead on red tape and give SA headquartered businesses the ability to submit their national workcover and payroll tax information to a local ‘clearing house’ facility. Opportunities to streamline compliance will allow us to get on with running our business and creating real jobs here in SA. Business Development Council over 1 year ago We have recently modelled implications to our Workcover premium due to potential claim costs via the online workcover calculator. It has led us to the startling realisation that we are financially better off to pay all medical bills out of our own pocket (just registering all incidents through Workcover). This is phenomenal considering that as an absolute minimum (even in the scenario of no claims to Workcover for 3 years) our industry pays approx 5-7% of payroll. This is untenable and needs investigation, benchmarking with other states and countries and rectifying to allow our precious manufacturing and construction jobs to survive. I am lead to believe that our premiums in SA are double that of many other states! Phil Sims over 1 year ago I was recently informed that psychological related Workcover claims have drastically increased in the last 2.5 years – more than 30% -for over 2x weeks lost time claims. It was the consensus of a group of HR professionals working for a number of SA businesses that a large factor behind this increase has been due to what industry considers the 1% rule. This means that if someone goes to their GP feeling depressed or anxious, and 1% or more of their depression or anxiety can be attributed to workplace stress, they can be entitled to a Workcover claim, regardless of what other stresses and trauma’s are going on in their life (family deaths etc). I appreciate this is a sensitive issue, but considering the amount of time a person spends at work- it is too easy to correlate work and any psychological trauma with this 1% or more “rule”. The rules around Workcover claim eligibility should to be reviewed as a priority. ====================================