The New South Wales government is facing ongoing disputes over its application of stamp duty indexation, with critics alleging the state has overcharged homebuyers and property owners by more than $3.5 billion since 2022. The controversy centers on how inflation adjustments are applied to transfer duty brackets under legislation introduced in 2019 by the previous Berejiklian government.
The current Labor administration, led by Premier Chris Minns, has defended its approach to stamp duty, relying on confidential legal advice from the Crown Solicitor’s Office. This advice, which the government has declined to publicly release but shared with the Real Estate Institute of New South Wales (REINSW), supports the government’s interpretation of indexation rules.
The dispute arose after the original 2019 legislation applied inflation indexation to stamp duty brackets starting in the 2020-21 financial year. However, in 2022, the chief commissioner of state revenue altered the approach by applying inflation adjustments to the original 2019 brackets each year, rather than compounding the indexation annually. REINSW and a coalition of experts have challenged this 2022 reinterpretation, arguing it results in “double counting” of inflation and inflates tax liabilities.
REINSW further commissioned legal advice from former Federal Court judge Alan Robertson SC, who stated that the government’s method was incorrect and that the correct interpretation should apply the consumer price index (CPI) annually to the relevant year’s brackets, not retrospectively to the original 2019 amounts. Despite this, solicitor Karen Smith from the Crown Solicitor’s Office has provided two memos endorsing the government’s position, asserting the current method aligns with the intent and wording of the Duties Act.
State Treasurer Daniel Mookhey and Finance Minister Courtney Houssos have declined calls to release the legal advice publicly, citing routine policies on confidentiality around legal documents, particularly those related to potential litigation. A government insider told media that the advice “lays to rest” any need for a government-ordered court review and suggests any challenge must be pursued by critics through the judiciary.
Opposition finance spokeswoman Monica Tuohono has promised that a Coalition government would commission a Supreme Court review of the stamp duty indexation practice if elected. The opposition’s position rests on concerns that since February 2022, homebuyers have been subject to inflated tax brackets, which Treasury documents show have caused confusion within the state’s own ranks.
Analysis of property transactions between July 2022 and June 2026 estimates the potential overcharge at roughly $3.5 billion, based on an average excess charge of about $3,000 across more than 1.1 million transfer duty transactions. Some estimates suggest the true figure could exceed $10 billion.
The outcome of this dispute will impact property buyers and the state’s revenue collection, with legal clarity on the indexation method likely requiring judicial intervention to resolve the conflicting interpretations.