The Property Council of Australia said the abolition of vendor tax is the State’s most affordable tax cut and would generate up to $280 million annually in extra stamp duty revenue, equivalent to 80 per cent of the revenue vendor tax brings in.
The abolition of vendor tax would relieve pressure on some 13,250 property investors from the State’s far west currently facing the tax.
Research released in the lead up to the May budget, conducted by Access Economics and commissioned by the Property Council, shows that vendor tax is driving transactions down and costing the NSW Government heavily in lost revenue from purchaser stamp duty.
Access Economics estimates that abolishing vendor tax – forecast to make $358 million this year – would largely be offset by a pick up in purchaser stamp duty of up to $280 million.
Significantly, the research findings coincided with a $140 million shortfall in purchaser stamp duty revenue last year, the only time during the Carr Government’s decade in power that stamp duty receipts fell short of budget.
The Property Council’s NSW executive director, Ken Morrison, said it was clear that the abolition of vendor tax was an affordable measure which would boost the State’s competitiveness and stamp duty revenue.
“The Access Economics study explodes the myth that abolition of vendor tax would cost a lot of money,” said Mr Morrison.
“Vendor tax costs the NSW Government nearly as much money as it makes.
“Abolition of this tax is affordable and we look forward to comments by the incoming Premier Morris Iemma on this issue tomorrow.
“Abolition of vendor tax would deliver tax relief to almost 13,250 property investors from the State’s far west, including 2,300 residents from Orange, 2,100 Bathurst residents and more than 2,000 people living in Dubbo.
“Vendor tax is not just hurting city investors. Orange is home to the fourth largest number of property investors outside the metropolitan Sydney region and falls in the State’s top thirty postcodes where investors live.
“The abolition of vendor tax is essential to get NSW back on a competitive footing with neighbouring States.
“The longer vendor tax exists, the more NSW will loose jobs and investment to other states. It’s imperative that this drain on our State is stopped immediately.”
Ken Morrison, NSW Executive Director, 02 9033 1906 or 0412 233 715