The New South Wales Government is reaping in the benefits from property sales following the abolition of the vendor tax, according to the Property Council.
According to NSW Treasury data obtained by the Property Council under FOI rules, revenue has picked up from property sales.
Property Council’s NSW executive director Ken Morrison said the data confirms that the abolition of vendor tax last year was the right move by the Premier Morris Iemma.
“The figures confirm research findings that removing vendor tax would stimulate market activity and Government revenue.
“The fact that stamp duty revenue has grown since vendor tax was abolished proves vendor tax was a handbrake on the market and stamp duty revenues,” he added.
According to NSW Treasury data, the NSW Government received $210 million more in stamp duty revenue in 2005/06 than it did in 2004/05 – when vendor tax applied.
Morrison said it shows that vendor tax was driving away business and pushing stamp duty revenue into the red.
“NSW is clearly better off without vendor tax.
“Since its abolition the Government has enjoyed a $210 million pick up in stamp duty revenue from people buying property,” he added.
Research by Access Economics, commissioned by the Property Council, estimated that abolishing vendor tax – forecast to make $358 million in 2005/06 – would largely be offset by a pick up in purchaser stamp duty of between $140 million and $280 million.
The Property Council said the $210 million increase in revenue between 2004/05 and 2005/06 occurred because the vendor tax handbrake had been released.
“Vendor tax stifled market activity. Its removal was the right decision, and the figures confirm that the NSW Government as well as taxpayers have benefited with this tax going. Vendor tax drove transactions out of the market, costing the Government millions of dollars in revenue from other sources.
“With vendor tax gone, NSW is enjoying a bounce back in stamp duty revenue,” Morrison concluded.
By Kathryn O’Meara
