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The Real Estate Institute of Victoria (REIV) called for “renewed focus” on the state’s property sector in the wake of the re-elected Labor government’s cabinet reshuffling.
The state body welcomed the re-elected Premier Daniel Andrews’ appointment of Danny Pearson as the minister responsible for overseeing the consumer affairs portfolio, which is largely responsible for real estate matters.
Mr Pearson will also continue to serve as Assistant Treasurer and will be leading a new Department of Government Services.
With a range of critical market forces and industry issues currently surrounding and influencing the sector, REIV chief executive Quentin Kilian said that “now is time for the government to put genuine focus on good property sector policy”.
“While we have been calling for the property sector to have a dedicated ministerial portfolio, we look forward to working with minister Pearson on a list of important issues, none more important than an update to the state’s tired tax regime,” Mr Kilian said.
Although the sector has undergone “rapid evolution” and saw “a significant shift” in market conditions, Mr Kilian pointed out that property policies — namely stamp duty — have failed to keep up with the times.
“Victorian property participants are still dealing with archaic stamp duty that does nothing but inhibit aspiring home owners, deter downsizers, and cripple investors, all which compounds our current housing supply crisis,” he stated.
With stamp duty equating to around 22 per cent of state and local government revenue in Victoria, the REIV executive acknowledged that the question of phasing out stamp duty is truly centred on what to replace it with and how the transition can be done in an orderly manner.
“[This] is where politics has the potential to interfere with good outcomes,” he remarked.
Aside from reducing purchase costs, REIV argues that stamping out the tax duty will enhance mobility of skilled people to the state, increase taxation transparency, improve housing affordability and improve stability in tax revenue modelling for governments.
It also suggested that removing stamp duty increases the likelihood of older generations relocating to more appropriate accommodations, which will release more housing stock for younger families.
With appropriate measures and intent by governments, REIV also offers that stamp duty removal will increase availability of funds to meet social and affordable housing needs.
“Other states are seeing the light on this antiquated tax, and REIV invites the Victorian government into a discussion with industry leaders and experts as we seek a better approach,” Mr Kilian added.
Mr Kilian added the 2021 changes to the Residential Tenancies Act and the early-2022 (but not yet released) Property Market Review also need to be immediate priorities for the government.
“On behalf of the 8,000-plus REIV members who employ more than 15,000 Victorians, we look forward to engaging with the returned state government and work towards renewing policy impacting one of Victoria’s most important sectors,” he concluded.
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