Post by mrp on Feb 23, 2017 23:43:26 GMT
Note the above, some simple maths was used to derive the effective tax rate from the tax component of the final sale price of a new home.
"Wouldn't the stamp duty alone lead you into inflation?
After you buy the house, do you pay property taxes each year on the assessed value?"
The effect of stamp duty is that people are unwilling to move and tend to renovate then buy new, it also lures mortgagors to undertake large loans they find difficult to service because the 1st home is stamp duty free. Yes it does lead to inflation, directly, and indirectly.
Property taxes are a state thing and generally have high thresholds, but many normal houses are creeping up to these limits. This stops people making otherwise rational decisions regarding taking a new job, moving to a amenable area and so on.
Land tax rates for NSW
www.osr.nsw.gov.au/taxes/land/rate
Stamp duty has thresholds as well - IIRC 300k to 1 mn is the first tier, which is where most of us plebs live. I think the rate is around 2.5 to 3%.
Typically all Australian property is subject to a LVT (rates), paid to the local council which we all hate but is actually quite efficient and fair. The property is assessed by the state valuer general's office and the local council applies the "rate" per the directions of the Department of Local Government, which can cap rates.
People whinge about rates because local councils are viewed as inefficient and do a lot of non-core work, but this is usually nearly always mandated by the relevant State's Local Government Act.
It is also a bit unfair as the tax system is one of our least worst (like the GST and mineral royalties) and local government receive State tied grants for specific projects and untied Federal assistance grants (FAGS) as well as other discretionary spending.
"Wouldn't the stamp duty alone lead you into inflation?
After you buy the house, do you pay property taxes each year on the assessed value?"
The effect of stamp duty is that people are unwilling to move and tend to renovate then buy new, it also lures mortgagors to undertake large loans they find difficult to service because the 1st home is stamp duty free. Yes it does lead to inflation, directly, and indirectly.
Property taxes are a state thing and generally have high thresholds, but many normal houses are creeping up to these limits. This stops people making otherwise rational decisions regarding taking a new job, moving to a amenable area and so on.
Land tax rates for NSW
www.osr.nsw.gov.au/taxes/land/rate
Stamp duty has thresholds as well - IIRC 300k to 1 mn is the first tier, which is where most of us plebs live. I think the rate is around 2.5 to 3%.
Typically all Australian property is subject to a LVT (rates), paid to the local council which we all hate but is actually quite efficient and fair. The property is assessed by the state valuer general's office and the local council applies the "rate" per the directions of the Department of Local Government, which can cap rates.
People whinge about rates because local councils are viewed as inefficient and do a lot of non-core work, but this is usually nearly always mandated by the relevant State's Local Government Act.
It is also a bit unfair as the tax system is one of our least worst (like the GST and mineral royalties) and local government receive State tied grants for specific projects and untied Federal assistance grants (FAGS) as well as other discretionary spending.