2017 NSW Budget: “the envy of the western world” | KPMG | AU

2017 NSW Budget: “the envy of the western world”

2017 NSW Budget: “the envy of the western world”

Jane Crisp and Jenny Lee discuss the 2017 NSW State Budget handed down on 20 June 2017.

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When the New South Wales (NSW) Treasurer, Dominic Perrottet, delivered his first Budget on 20 June 2017 he noted that the Budget bottom line "was the envy of the western world". As part of the Budget the NSW Government announced various changes to their State taxes. The changes were introduced under the State Revenue and Other Legislation Amendment (Budget Measures) Bill 2017.

The measures include:

  • Foreign owned Australian-based developers which acquired residential land on or after 21 June 2016 may be entitled to a refund of any foreign surcharge purchaser duty paid. The foreign owned developer needs to be an Australian corporation and the amount of refund will be based on the proportion of dwellings sold to unrelated persons. The refund application must be made within 12 months of completing the sale of dwellings but within 5 years of the corporation having first acquired the land.
  • From 1 July 2017, foreign purchaser surcharge duty will increase from 4 percent to 8 percent. Commercial residential property will be retrospectively exempted from 21 June 2016 such that a refund may be sought for any foreign purchaser surcharge duty paid. The Chief Commissioner will issue guidelines as to what constitutes “commercial residential property” but it will include purpose built student accommodation.
  • From the 2018 land tax year, land tax surcharge rate will increase from 0.75 percent to 2 percent per annum. “Commercial residential property” will be exempt from the land tax surcharge. If the land tax surcharge has been paid for the 2017 land tax year, an application for refund can be lodged.
  • From 1 July 2017, the current concession for residential off-the-plan purchases which allows for a delay of up to 12 months in the payment of duty will be restricted to owner occupiers only.
  • From 1 July 2017, insurance duty on lenders mortgage insurance will be abolished.
  • From 1 January 2018, small businesses with aggregate turnover of less than $2 million will be exempt from insurance duty on their premiums for commercial vehicle insurance, commercial aviation insurance, occupational indemnity insurance, and product and public liability insurance. From 1 January 2018, insurance duty on crop and livestock insurance will be abolished.

Various measures to assist first home buyers which were announced on 1 June 2017 have also been included in the amending Bill.

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