Aussie homeowners are owned around $1 billion in refunds, one of the country’s leading real estate bodies says.
According to the Real Estate Institute of NSW, the NSW government has made a potential error in collecting the stamp duty on homes sold in the state, to the tune of as much as $1bn.
The massive amount of money states and territories across the country continue to pull in from stamp duty on property sales, despite the housing crisis, has become a hot-button issue.
But it is one that has been largely ignored by governments at all levels.
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Homeowners could be due a massive refund.
A massive refund however, could serve to only increase the spotlight on another government levy, many homeowners, potential homeowners and experts alike believe is warping Australia’s housing market and making it harder for cash-strapped Aussies to afford a home.
In the most recent financial year, through to May 2026, the NSW government raked in $12.52 billion in stamp duty or transfer duty.
Australian state and territories pull in around $35bn a year from stamp duty.
Any significant moves in regard to stamp duty in NSW, could flow onto other states.
Ahead of the NSW State Budget on June 23, the Minns Government is being urged to come clean on the issue.
“With the Treasurer [Daniel Mookhey] currently preparing the state’s budget, and with a very real possibility Government will have to refund about $1 billion, it’s reasonable to expect him to lean into the issue,” REINSW CEO Tim McKibbin said.
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REINSW CEO Tim McKibbin says the NSW government has potentially made a massive stamp duty error.
“REINSW has pointed out the potential error in stamp duty collection based on expert advice. To immediately dismiss this possibility on the basis that no-one has raised the issue previously misses the point.
“Someone has to be first.
“The Treasurer cannot bury his head in the sand. If Government has collected more stamp duty than it should have, it is an error which must be rectified.
“Government says it regularly consults with tax practitioners but as I understand it, this consultation is one-way. These practitioners do not get to look under the hood. It is time for complete transparency.”
The dispute is in regard to the interpretation of amendments to the Duties Act in 2019, introduced to address the impact of “bracket creep” where rising real estate prices push up the taxes.
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NSW Treasurer Daniel Mookhey is being urged to look into the issue. Picture Thomas Lisson
In 2022, Revenue NSW said they had identified errors in the duty thresholds used to calculate transfer duties on property purchases, which resulted in homebuyers paying less stamp duty than they should have. This was changed in February 2022 and remains in effect.
REINSW is calling on the Treasurer to publish his calculations and interpretation of the applicable law for the following:
(a) The tax brackets between 1st July 2021 and February 2022.
(b) What did Revenue NSW get wrong on the 1st of July 2021?
(c) The calculation of the tax brackets from February 2022 to date.
“Without the transparency consumers require and deserve, it has been necessary for REINSW to reverse engineer the outcome to determine Government’s methodology. That process suggests the refund to consumers is in the ballpark of $1 billion,” Mr McKibbin said.
“It is concerning that Treasury came out immediately to declare its calculations are correct, despite Government acknowledging its original adjusted amounts for 2021-22 were incorrect.
“In these circumstances, it is reasonable to expect Government to have taken a little longer to consider the issue. The application of the legislation is complex and if the interpretation is called into question, then it would be prudent for Treasury to take some time and care before having a ‘spokesperson’ respond,” he said.
Premier of New South Wales is under fire over stamp duty on homes. Picture: NewsWire / Gaye Gerard
A Revenue NSW spokesperson told The Daily Telegraph the claims “are not true”.
“Revenue NSW engages regularly with tax practitioners and tax-related representative bodies – the Chief Commissioner has not been made aware of any suggestion the indexation provisions have been applied incorrectly,” the spokesperson said.
“The Real Estate Institute of NSW is welcome to be in touch with Revenue NSW if they have any concerns on the matter.”
McKibbin also took aim at the NSW Government last month due to concerns over stamp duty bracket creep, labelling Minns’ stance as ‘hypocrisy on steroids’.
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