This week’s state budget not only clears the way for more of the same when it comes to Ku-ring-gai’s burgeoning high-rise apartments but threatens to make it worse, according to Member for Davidson, Jonathan O’Dea.

“The dropping of stamp duty on dwellings worth up to $600,000, bought off-the-plan in the pre-construction stage, will further encourage developers to construct shoebox apartments in the Ku-ring-gai Council area,” Mr O’Dea said.

“It may be good news for developers and speculative investors but the result will be more small apartments under the $600,000 cost,” he said.

“While there will also be a 25% reduction in stamp duty for homes worth up to $600,000 that are already under construction or newly completed, the vast majority of existing home owners in Ku-ring-gai will receive nothing.

“In fact, those involved in transactions on existing homes worth over $500,000 will be hit with a new property tax,” Mr O’Dea said.

“On one hand the State Government gives with questionable consequences for the people of the Ku-ring-gai Council area, while on the other hand it imposes a new tax for the vast majority of home owners,” Mr O’Dea said.

According to figures supplied by APM*, 87.8% of properties in Ku-ring-gai sold above $500,000 last year. However, that figure will steadily rise as property prices increase.

“Properties sold between $500,000 and $1 million will incur a 0.2% levy, which increases to 0.25% above $1 million. The result is that a $1 million sale will incur an additional $1,000 tax, while the figure for a $2 million property will increase to $3,500.

“Like the rest of the NSW budget, these new arrangements have been announced by a NSW Labor Government that is in disarray and with apparently little thought for our area,” Mr O’Dea concluded.

*APM (Australian Property Monitors) figures for 2009 show that in Ku-ring-gai only 351 out of 2,868 properties were sold below $500,000.