Property industry groups have slammed the New South Wales Government’s decision to introduce a new tax on property transactions, but what impact will it really have on the market?
BY MATTHEW LIDDY
In the shadow of the Federal Budget last week, the NSW Government announced it was introducing a new transaction charge of 0.2 per cent for properties valued at $500,000 and above, or 0.25 per cent above $1 million. The decision to introduce what’s become known as the ‘ad valorem’ levy (ad valorem is Latin for ‘according to value’) brought a furious response from the property industry.
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Here’s an idea to reignite competition in the mortgage market and get credit flowing again, but will the Federal Government consider it?
BY STUART WEMYSS
The Federal Government touted its Budget announcement in relation to the proposed 50 per cent discount on interest income of up to $1000 (to save personal income tax for investors) as a mechanism to assist the banks with funding mortgages. It will revive competition, it said. The thinking is that people will be encouraged to save more money if they won’t get taxed as much. The benefit to the banks is that an increase in bank deposits will ease the funding pressures as they won’t have to borrow as much from expensive overseas money markets. Banking deposits is one of the cheapest forms of funding at the moment.
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