Australia: Is mortgage duty here to stay in NSW?

Many businesses have made funding decisions on the NSW Government's commitment that mortgage duty would finally be abolished on 1 July 2013, but it seems that it may be in place for at least another two years.

Deferral of the abolition of the duty may be deemed necessary to fund a deal struck last week between Federal and NSW Governments to implement the Gonski education reforms. NSW's portion of the proposed additional $5 billion in additional funding is in the order of $1.7 billion.

Media coverage regarding this "once-in-a-generation" deal extols the virtues of increased education funding. However, to date, details available around how the NSW Treasurer, Michael Baird, will undertake this task have been far from complete.

It is beginning to become apparent that about $330 million may be freed up by deferring the abolition of three so called 'nuisance' business taxes (mortgage duty, duty on the transfer of non-land business assets and duties on securities in unlisted entities) for at least two years.

The business world is becoming increasingly frustrated with the delay, as the 'nuisance' business taxes have been on the chopping board for over thirteen years. They were originally set to be abolished when the GST was introduced at the turn of the millennium.

Abolition of these taxes is currently scheduled to occur on 1 July 2013, however, it is looking increasingly unlikely that this will happen.

Whilst the deferral of the 1 July 2013 abolition date has not yet been confirmed by the NSW Government, references to a 1 July 2013 abolition date have recently disappeared from the Office of State Revenue website.

For now it is just a waiting game to see how long these 'nuisance' taxes will remain in effect.

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