An agreement struck with the NSW Premier has seen a state farming body walk away happy, after securing an exclusion from the government’s proposed stamp duty reforms. 

The NSW Government stamp duty reform proposal would scrap stamp duty on property in favour of an annual land tax charged to owners in a bid to make the housing market more accessible for new homeowners.

According to NSW Farmers President James Jackson, the changes would have the opposite effect on farmers. 

“We have had a number of discussions with the NSW Premier, including in recent weeks, about the potential adverse impacts of a property tax on farms in NSW,” Mr Jackson said. 

While a consistent annual rate may be more fitting than the more daunting upfront cost for first-time home-owners, NSW farmers have insisted that the inconsistency of income in agriculture could cause more of a burden. 

Moreover, according to NSW Farmers, Independent modelling showed that after 15-18 years, the total cost of the tax would exceed the value of stamp duty, creating an additional charge for every year afterwards. 

Mr Jackson said that NSW Farmers campaigned hard against the tax that ‘would have made it even harder to make a living from farming’.

““NSW Farmers has been fearless in our advocacy on this matter – farmers purchase properties looking decades ahead, so the prospect of a recurring annual tax on farmland is something our membership has been deeply opposed to.” 

They also voiced concerns that the additional cost to do business as a farmer into the future could discourage future farmers from entering the industry. 

“With the global population growing, we need more farmers being more productive, and the potential benefits for Australia’s economy are enormous,” Mr Jackson said. 

Following meetings with Premier Dominic Perrottet, NSW Farmers have confirmed that farms will be completely excluded from any future property tax advanced by the Coalition. 

Instead, they will remain subject to the existing stamp duty arrangements. 

According to The Tax Institute, the change towards an annual property tax could hold benefits for residential purposes, reducing cost barriers for potential purchasers. 

“First home buyers do not have to save an extra significant amount to pay as a lump sum, and can continue to more freely move in the future,” noted a report from The Tax Institute. 

“An annual property tax is also a more stable source of income for governments, allowing them to more accurately forecast revenue and expenses,” the report read.

Under the proposal, owner-occupied residential properties will pay (at the time of publishing) a $400 fixed fee each year, while investor-owned residential properties will be subject to a $1500 fixed fee.

As part of the proposal, the NSW Government survey within the consultation process found that 58.8 per cent of respondents believe the changes would help them enter the property market. 

The proposed changes are yet to be introduced into NSW.