Business owners, builders and property buyers are the big winners from the NSW budget released earlier this month. There will also be a smile on a few pub owners' faces as lower gaming machine tax rates will apply to hotels from 1 July.
The planned sale of NSW Lotteries has resulted in NSW Treasurer Eric Roozendaal being able to announce a budget surplus of $101 million for the 2009/10 financial year. There are no new taxes.
The main highlights of the budget include:
Stamp duty relief on new homes
Buyers of new dwellings that cost up to $600,000 will receive a 25% cut in normal duties, worth up to $5,623, if building has already started on the property.
Zero stamp duty for off-the-plans
Buyers purchasing "off-the-plan" between 1 July 2010 and 30 June 2012, will pay zero stamp duty. It is expected that this concession, worth up to $22,490 per home, will assist the financing of new developments and help new home buyers as the NSW Government looks to encourage new home construction and boost housing supply.
Older home owners start downsizing!
Great news for those thinking about downsizing their home in retirement. For two years, from 1 July 2010, people aged over 65 will be able to sell their family home and buy a newly constructed home for under $600,000 and pay zero transfer duty.
Infrastructure highlights
Sydney City will benefit from the NSW Government investing $62.2 billion in infrastructure over the next four years including:
- $152.1M upgrade of Sydney Opera House to improve public safety, security and vehicle access;
- Major building projects at Randwick and Ultimo TAFEs;
- $55M light rail line extension from Dulwich Hill to Lilyfield;
- 100 new bendy buses in the next year;
- Easy access upgrades to Central, Martin Place and St James train stations as well as $20M for a pedestrian tunnel from Wynard;
- $30M construction of Barangaroo Headland Park;
- Upgrade of the John Maddison Tower / Downing Centre court complex;
- Inner West Busway including Victoria Road;
- Planning and construction of new police stations at Burwood and Leichhardt; and
- A major expansion planned at Port Botany.
Payroll tax reduced
From 1 July 2010, the payroll tax rate will reduce from 5.65 per cent to 5.50 per cent and then down to 5.45 per cent from 1 January 2011. The payroll tax threshold increases from $638,000 to $658,000 whilst paternity leave, up to 14 weeks, will be exempt in the definition of wages paid. The two cuts are expected to save $3,814 per annum for businesses with a $2M payroll. A welcome relief that will encourage employment growth.
Insurance protection tax abolished
The Insurance Protection Tax, brought in after the collapse of HIH, is set to be abolished from 1 July 2011. Hopefully the insurance companies will pass on the $69M in annual savings to policyholders ... or at least put a hold on any short term premium rises.
Budget surpluses are also forecast out to 2013-14.