13,500 property investors from the NSW southern highlands could be relieved of the vendor tax burden on investment property if the NSW Government listens to new research showing that abolition of this tax would substantially pay for itself.
The NSW Government would reap up to $280 million in extra stamp duty revenue every year if it abolished vendor tax, equivalent of up to 80 per cent of the revenue vendor tax now brings in, according to a new research by Access Economics.
The Access Economics report commissioned by the Property Council of Australia shows the vendor tax is driving transactions out of the market and costing the Government heavily in lost revenue from purchaser stamp duty.
Access Economics estimates that abolishing vendor tax – forecast to make $350 million this year – would largely be offset by a pick up in purchaser stamp duty of between $140 million and $280 million.
The Property Council’s NSW executive director Ken Morrison said this research confirms that the NSW Government can afford to abolish its failed vendor tax.
“The Access Economics study explodes the myth that abolition of vendor tax would cost a lot of money.
“Abolition of this tax is an affordable measure which would deliver tax relief to over 13,500 property investors the southern highlands, including over 8,500 people living in Campbelltown, Camden, Narellan Vale, Minto and Macquarie Links,
Campbelltown is home to more than 3,200 property investors, falling within the State’s top ten postcodes where investors live.
“Vendor tax is not just hurting inner city investors. Campbelltown is home to more than 3,200 property investors, falling within the State’s top ten postcodes where investors live.”
These findings coincide with news of a $140 million shortfall in purchaser stamp duty revenue, the first time in the Carr Government’s decade in power when stamp duty receipts have fallen short of budget.
“Vendor tax is pushing stamp duty revenue into the red and could be abolished with no major effect on tax revenues,” Mr Morrison said.
“This is a tax that eats its own head off, driving transactions out of the market and costing the Government millions of dollars in revenue from other sources.
“If the vendor tax was abolished tomorrow, NSW would receive a permanent increase in stamp duties of up to $280 million each year.
The Property Council is part of a coalition of property groups including the Housing Industry Association, Real Estate Institute of NSW and Urban Development Institute of Australia calling for the abolition of vendor tax in the May 24 budget.
Ken Morrison, NSW Executive Director, 0412 233 715 or 02 9336 6906