NSW stamp duty take falls 23% in a month to $663m

The NSW government collected $663 million in stamp duty from residential property transactions in September, down 23 per cent from $864 million in the same month a year earlier.

Phil Tarrant raised the figures on the Property Buzz podcast, describing them as an immediate consequence of government tinkering with the property market.

"Extrapolate it out over four years, that downturn, $30 billion less in the New South Wales coffers," Tarrant said. "They're going to go broke."

He said he and co-host Liam Garman had flagged the risk when the federal budget was handed down. "I don't want to be the bloke that always says I told you so," Tarrant said, before arguing the result was foreseeable. "Mess around with probably being the most critical infrastructure, mess around with property."

Tarrant has previously spoken on the podcast about the third, fourth and fifth-order consequences of property policy changes. He described the stamp duty slump as the first of those to land.

A national estimate of $7.36 billion

Garman said the NSW number lined up with earlier forecasts the pair had made. Applying a similar proportional fall across the country, he estimated a national loss of $7.36 billion in stamp duty revenue.

"You and I on podcasts in the last six months have said between six and eight," he said. "It's right bang in the middle."

Garman said the arithmetic was not complicated. "If property prices drop by 15 per cent, and then listings are also going to drop or sales are going to drop as well, and you add the two together, it's going to be about 20 something."

He said he expected the position to deteriorate further, pointing to listings data out during the week.

Trust restructures and stamp duty relief

The revenue discussion came as NSW Treasurer Daniel Mookhey flagged relief for investors caught by federal changes to discretionary trusts, which Garman described as imposing a minimum 30 per cent tax.

Garman said a re-elected NSW Labor government would allow rollover relief so that restructuring a trust would not trigger stamp duty.

"If it is now wiser for you to own this property in a different company or a different trust, they will allow you to move it without triggering stamp duty," Garman said, stressing that was his interpretation of the announcement and that the commitment was conditional on re-election, with the state election due in March.

Tarrant said any opposition would likely match the promise. He noted the NSW government was "running around town right now opening up childcare centres" and suggested it was "starting to get a bit jittery".

Both speakers were broadly complimentary of the NSW government's performance. Tarrant said Premier Chris Minns "makes it hard to be critical of him". Garman said Minns and Mookhey "seem to be playing it pretty straight".

Tarrant also said he had seen reports the NSW opposition would make changes to payroll tax if it won government.

Victoria and the One Nation factor

Garman said he had been reading about the Victorian election and reported, citing the Australian Financial Review, that Victorian Labor Premier Ben Carroll had promised to return the property tax threshold to $300,000, after it was dropped to $50,000 under Daniel Andrews.

He described the Victorian contest as "within the margin of error" and "pretty 50-50 at the moment".

Garman also argued investors doing policy research can no longer confine themselves to the two major parties. "It's now not enough to bounce between Labor and Lib," he said, adding that One Nation had "pretty thorough policies" including bringing negative gearing back, capped at two properties.

Inflation pressure building

Garman rejected the argument that government spending was not inflationary, citing aggregate demand from well-paid public sector jobs and the effect of heavier government borrowing on bond yields, which in turn lifts the cost of debt for large corporates.

He noted that fast-moving consumer goods and imported items rose only 2.2 per cent in the recent CPI figures, which he said "actually anchored inflation lower", undercutting the argument that overseas shipping costs were the main driver.

Listen to the full episode: Brisbane Clearance Rate Plummets. Is The Property Market Freezing?