THE NSW Labor government has not decided if it would index its new $90 million property slug despite selling the tax on the basis that most properties fall below the $500,000 threshold.
Asked about indexation yesterday, NSW Lands Minister Tony Kelly told The Australian it was "a discussion we're yet to have". The government has spruiked the controversial measure on the basis it is designed to increase the security of property title and that 70 per cent of properties currently fall below the threshold.
"If we want to maintain that 70-30, roughly, obviously one way of doing it is indexing the $500,000," Mr Kelly said.
The new transaction fee is scaled to the value of properties and will cost the buyer of a $600,000 home $200, and the buyer of an $850,000 home $700, on top of more than $30,000 in stamp duties. But there is nothing in the measure, as announced by Mr Kelly on Wednesday, to prevent more and more properties being captured by the tax as a result of "bracket creep".
Property Council spokesman Glenn Byres said yesterday the Sydney property market was "galloping ahead", with the median price of a house now close to $600,000.
"A tax structured this way is going to catch more people and at a higher rate, bringing in more revenue," he said.
"It can only have one consequence: more people lifted above the threshold, and those above going further and further up the payment scale."
The opposition announced last night it would repeal the new tax if it won office at the election next March. "This is a mean and tricky way of trying to gouge even more money from families," NSW Opposition Leader Barry O'Farrell said.
The Coalition pointed out that a number of title-security measures announced by Mr Kelly, such as a new watermark, have already been introduced.