The State’s leading property associations today met Treasurer Andrew Refshauge to call for the abolition of Vendor Transfer Duty in the 2005/06 NSW Budget.
The Urban Development Institute of Australia (UDIA) NSW, the Housing Industry Association (HIA), the Real Estate Institute (REI) of NSW and the Property Council of Australia (PCA) presented the Treasurer with a submission outlining the ten reasons why the Vendor Duty must go.
The submission argued that vendor duty abolition was an affordable measure and detailed the harm the tax was doing to the state’s property investment market and the overall economy.
REI President, Rowen Kelly said Vendor Duty was a disastrous tax which had not raised the revenue anticipated by the Government yet had devastated the state’s residential property market.
“Vendor Tax has caused the residential property market to drop significantly, devastated the retirement savings of ordinary mum and dad investors and led to a record shortage of rental accommodation in Sydney,” Mr Kelly said.
“Sydney could face a rental accommodation crisis over the next two years unless the NSW State Government acts now to remove this tax,” he said.
The Property Council of Australia noted that abolition of vendor tax was affordable and should be the first thing announced on budget day.
“This tax is simply making NSW a less attractive investment location. Yet it could be abolished with only minimal loss to government revenue because of the dampening effect it has on transaction,” said NSW Vice President Chris O’Donnell.
“Vendor Tax is biting,” said HIA NSW President, Peter Morgan. “Lower industry activity means fewer jobs and fewer jobs is a blow for the NSW economy. For too long housing has been an easy tax target – vendor duty merely adds insult to injury for the homebuying public”.
“Egan's rationale of imposing taxes to promote affordability was pure nonsense. Dr. Refshauge should reduce taxes on property, abolish vendor duty and give people a chance,” said Ralph Bruce, President of UDIA NSW.
The property industry groups said they would continue to lobby the Treasurer to remove Vendor Duty.
To download a PDF copy of the joint submission, click here.
See below for 10 reasons to abolish Vendor Duty
For further information contact:
Ken Morrison, Property Council Of Australia, 0412 233 715
Rowen Kelly, Real Estate Institute of NSW, 0438 688 848
Elizabeth Crouch, Housing Industry Association, 0419 86 86 84
Ralph Bruce, Urban Development Institute of Australia 0407 006 005
10 reasons to abolish Vendor Duty
A call from NSW leading property associations to the NSW Treasurer Andrew Refshauge
- property is highly taxed, accounting for almost 40% of total state tax revenue.
- the Government is in a strong budget position, set to enjoy a budget surplus of $563 million in 2004/05, growing to $1.4 billion by 2007/08.
- vendor duty abolition would be substantially self-funding, resulting in a permanent annual pick up in purchaser duty receipts of between $140-$280 million.
- vendor duty is costing the Government money, with purchaser duty receipts behind budget for the first time in over a decade.
- vendor duty has applied a handbrake to property transactions, with sale numbers falling across residential and commercial markets.
- vendor duty is driving investment dollars out of NSW, with Queensland the main beneficiary.
- vendor duty is reducing housing affordability in NSW, adding to the $145,000 in state and local tax costs already faced by new housing in greenfield estates.
- vendor duty has resulted in residential vacancies rates hitting a five year low, with rents and competition among renters for housing increasing.
- vendor duty is hurting ordinary people, with a large proportion of property investors harking from Sydney’s western suburbs and regional towns.
- vendor duty is costing jobs, construction and renovation activity are slowing because of this tax meaning there is less work for builders and tradesmen.
Property Industry Association Representatives at the meeting Rowen Kelly
President
Real Estate Institute of NSW
Geoff Hunter
General Manager
Real Estate Institute of NSW
Chris O’Donnell
Vice President
Property Council of Australia
Ken Morrison
NSW Executive Director
Property Council of Australia
Ralph Bruce
President
Urban Development Institute of Australia NSW
David Poole
Executive Director NSW
Urban Development Institute of Australia NSW
Peter Morgan
President
Housing Industry Association
Elizabeth Crouch
Executive Director
Housing Industry Association
