How refreshing that the state government has come good on its promise to repeal the Torrens Assurance Levy – an additional impost dishonestly imposed by the former government on home buyers last year.
This cost has, in many cases, added thousands of dollars to the cost of purchasing property. Of more concern, it was structured to escalate dramatically in future years.
It is now been 'nipped in the bud'.
Legislation was introduced into state parliament this week – to abolish the Levy with effect from 1st July 2011.
The only reservation that I have is that it is only abolished for contracts exchanged after that date. This means that any contracts exchanged in the next 6-7 weeks will still be liable for the Levy when settlement is effected in the new financial year.
This is likely to cause a distortion in the real estate market during this period as many buyers “hold off” from formally exchanging contracts until after 1st July 2011.
Whereas such a delay may not always be feasible there will certainly be a good percentage of buyers looking to save the thousands of dollars by simply deferring their plans for a few weeks. Time will soon tell how this will impact on the NSW property market in this short term.
Despite this small reservation, I join all of my clients in acknowledging and welcoming the new government’s honouring of this election promise.
What do you think? Will this make you hold off on buying property until 1st July? Tell us your thoughts...
Comments
How much was it / is it costing ?
How much less does it now cost?
What is the Torrens Assurance Levy?
The Torrens Assurance Levy was basically just another property tax for land transfers. When it was introduced, it was said that the funds raised would be used to pay compensation to people who are deprived of land, or who otherwise suffer loss, as a consequence of the operation of the provisions of the Real Property Act 1900 (NSW) dealing with Torrens Title. Examples of this are fraud or errors in the title registration process.
How much was it / is it costing?
1. Property price between $500,000 - $1,000,000 = 0.2% of the amount by which the purchase price exceeds $500,000 (so on a $750,000 property, this would be $500)
2. Property price over $1,000,000, the levy is $1000 plus 0.25% of the amount (so on a $1.6 million property, this would be $2500)
You can use the calculator here to work out how much it would be for your property: www.lpma.nsw.gov.au/land_titles/torrens_assurance_levy
How much less does it now cost?
From 1 July 2011, this tax will be completely abolished, so home buyers will no longer have to pay the Torrens Assurance Levy.
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