Real Estate Institute of NSW president Rowen Kelly says NSW Treasurer Refshauge's failure to abolish Vendor Duty in today's State budget was a short-sighted grab for dollars that will have long-term negative ramifications on the NSW economy.
Mr Kelly said while the Vendor Duty remains in place the State's property market will remain uncompetitive with other states and as a result the whole economy will suffer.
"This tax grab might have made sense in a perverse way in 2002 at the height of the property boom, but with a steady market that is likely to remain flat for at least a further 12 months, it appears to be a damaging attempt to boost revenue at the expense of the property and construction sectors," Mr Kelly said.
"Dr Refshauge claims the Vendor Duty is needed to fund the Government's First Home Plus Scheme. The fact is that no money is required to fund this scheme. The Government is merely forgoing a small amount of income from stamp and mortgage duty paid by first home buyers," he said.
"The tax is in fact making it harder for first home buyers by creating a cycle that is stifling the property market and the economy.
"This tax deters investors from selling, which creates a shortage of supply in the market and pushes prices up. While turnover has fallen dramatically since the height of the property boom, prices have crept up.
"With fewer houses being sold the flow on effect moves beyond the real estate industry to builders, renovators, and people who make and sell furniture and appliances. Everyone in this State will be financially affected one way or another.
"This is a budget which does not care about the future of this State. New investors are needed to fund new developments to supply homes for first home buyers and renters. These people are taking their money elsewhere and these investment dollars will be forever lost to NSW.
"The Real Estate Institute of NSW welcomes the reinstatement of the land tax threshold announced today. However, there is no doubt that this was purely a politically motivated move by Dr Refshauge who has secured a few votes by removing the land tax burden before the next election.
"Mum and dad investors will be wondering why they still have to pay the tax this year and many will still be feeling the financial pain at the next State election.
"The Real Estate Institute of NSW renews its call to abolish the Vendor Tax to kick start the property industry and to keep the NSW economy functioning" Mr Kelly said.
(Source From REINSW)
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