NSW urged to axe mortgage duty to help ease housing crisis

Now that Queensland has abolished mortgage duty, a Senior Counsel at leading law firm DLA Phillips Fox says the New South Wales government should do likewise in order to help ease the state's chronic housing shortage.

'Experts are predicting that the housing crisis is going to get worse so the New South Wales government should be looking to encourage investment in the property industry by removing as many barriers to investment as possible,' said Peter Faludi, Special Counsel at DLA Phillips Fox.

As of today, mortgage duty is no longer payable in any state or territory of Australia, other than New South Wales and South Australia, after Queensland brought forward by six months its plans to abolish the tax.

South Australia will continue to impose mortgage duty at the reduced rate of $1.50 per $1000 of debt while New South Wales imposes it at the full rate of $4 per $1000.  New South Wales plans to abolish mortgage duty but not until 1 July 2009.

Property investors and developers in New South Wales and South Australia will continue to have to pay mortgage duty and consider its impact on the feasibility of any projects, unlike investors and developers in the rest of the country. 

'Given the additional costs to corporate and commercial borrowers in raising debt finance in the current markets, it is difficult to understand why New South Wales and South Australia continue to impose this form of duty,' Faludi said.

'The acute housing shortage and the lack of property development should indicate that any tax breaks that can be provided to  property developers and others involved in major productive projects should be seriously considered.

'It is my view, that any assistance which can be given to reduce the costs of development and make New South Wales competitive with the rest of Australia should be given priority'.

For more information please contact:

Peter Faludi
Special Counsel, DLA Phillips Fox
E: peter.faludi@dlaphillipsfox.com
P: +61 2 9286 8159
M: +61 401 500 528

Clare Buttner
Media Relations Consultant, DLA Phillips Fox
E: clare.buttner@dlaphillipsfox.com
P: + 61 2 9286 8400
M: + 61 415 932 936