I knew it was my lucky day. Returning home from a walk this afternoon I removed the clutter of advertising material from my letter box. A rather subdued, tasteful card caught my eye as I shuffled through the assortment of catalogues and lost kitten notices. I noted the heading on a sage green coloured card - "Halcyon Close" - featuring a double storey, apparently newly built, modern styled townhouse complex.
(With apologies to real gorillas, who don't benefit at all from property development)
With state Labor parties under the hammer all over Australia, the Property Council has chosen its moment to put pressure on the weak Brumby Victorian Government to lower stamp duty, even though in the recent Victorian budget, changes were made to lower it. The Property Council uses the argument of comparison with the other states to force the change. This is just another race to the bottom where all state governments try to curry favour with the real estate industry big-wigs for donations for the next election campaign.
This article from the Age (quoted below) looks more like a slight edit of a Property Council's press release. At no point is any effort expended by the journalist to examine the issue.
The reality is that adjusting stamp duty does not change the total price someone is prepared to spend. A potential buyer can afford to buy real estate only up to the amount a bank is prepared to lend to them. If a government reduces the property transaction tax (i.e. stamp duty), the potential buyer can still afford the same total amount, but the seller of the property will get more money, and the government's take is reduced by the same amount. The Property Council is a lobby group representing those who transact in real-estate, and whatever communication they put out in the public domain should be seen in that light.
The lobby talks about "competitive advantage" and that Victoria's stamp duty charges are the highest in Australia. Both of these arguments have little merit. Companies and individuals choose to site themselves for reasons other than a few $1000 difference in property transaction costs. Also there is no stamp duty in Victoria on purchases of new houses off-the-plan (pre-construction). This reduces the average stamp duty paid.
It's sad that in a newspaper like The Age there still seems to be a need to pander to real-estate interests even though their classifieds revenue is falling off a cliff due to the successes of dot-coms like realestate.com.au, seek.com.au and carsales.com.au (all non-Fairfax companies !!)
Article from The Age, "Brumby under pressure to cut stamp duty"
Brumby under pressure to cut stamp duty
* Stamp duty for first home buyers
* Natalie Craig
* September 9, 2008 - 1:43PM
The Victorian Government is under pressure to cut stamp duty after Queensland abolished the charge for first home buyers for properties under $500,000.
- Brumby under pressure to cut stamp duty
- Queensland increases exemption to $500,000
- Victoria now highest charges in nation ...."