Voters to decide on plan for 2.25pc vendor duty

Voters to decide on plan for 2.25pc vendor duty

12 March 2015 by Nick Bendel 2 comments

A new property tax will reportedly cool the Sydney market and make life easier for first home buyers.

The Greens have pledged to restore a vendor duty of up to 2.25 per cent on investment properties if they win the 28 March election.

The vendor duty, which the previous Labor government introduced in 2004 and then axed in 2006, has been forecast to raise $600 million in 2015/2016.

This would apply to the sale of all land other than owner-occupied homes and family farms for which the value since purchase has increased by more than 12 per cent.

“The duty was designed to address the combination of capital gains and negative gearing tax concessions introduced by the Howard government,” the Greens said.

“By putting a duty on vendors, the benefits of speculation were reduced, thus taking the edge off housing price bubbles and giving first home buyers a much better opportunity to purchase on a more level playing field with speculators.”

The Greens argue that targeting “property speculators” will help to rebalance the economy.

That in turn will allow the Reserve Bank of Australia to further cut interest rates without triggering a property bubble in Sydney, the Greens added.

“Sydney is at risk of experiencing another property bubble, at the same time unemployment is rising. A whole generation of younger Australians is being locked out of homes and jobs,” they said.

However, Real Estate Institute of NSW president Malcolm Gunning said the reintroduction of vendor duty would damage the property market and the state.

“The data from the last time we had a vendor duty is clear. The NSW government will be significantly worse off since revenue from total tax collected will reduce because the property market will freeze up as it did last time,” he said.

The Greens are not the only political party to target the real estate industry during this election campaign.

The Coalition government promised to instigate the “biggest crackdown on real estate underquoting in over a decade” if it gets returned.

[LinkedIn: Is underquoting a serious problem or a media beat-up?]

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2016

With a combined sales volume of $13 billion in 2016, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
REVEALED: The 10 best agents in Australia for 2017

For the first time ever, the top 10 agents in the REB Top 100 Agents ranking are revealed in this exclusive podcast. ...

View all podcasts

Are dodgy agents being punished enough?

Yes (8.6%)
No (55%)
Only in some states (2.3%)
Not all dodgy agents are being found out (34.1%)

Total votes: 220
The voting for this poll has ended on: April 15, 2017
Do you have an industry update?