Thumbs up for commercial stamp duty cuts; thumbs down for residential stamp duty snub

The Urban Development Institute of Australia has given a thumbs up to the South Australian Government on its decision to abolish commercial stamp duty in yesterday’s State Budget, but a thumbs down for ignoring residential stamp duty cuts.

The UDIA (SA), the state’s peak representative body for the urban development industry, congratulates the State Government for electing to phase out commercial conveyance stamp duties over the next three years, commencing on July 1 this year until its complete abolition on July 1, 2018.

“This is a positive step by the State Government that will assist in the transaction of commercial premises in SA, which will in turn serve as a kick-starter for more enterprise,” said Terry Walsh, UDIA (SA) Executive Director.

“It is a significant budgetary measure that will help our state’s ailing economy by encouraging investment in South Australia from local, interstate and international investors.”

However, the UDIA has criticised the State Government for disregarding residential stamp duty in the Budget.

“We’re disappointed the Government has failed to recognise that stamp duties on the purchase of residential property remain the highest in the country,” said Mr Walsh.

“The UDIA’s response to the Government’s Tax Discussion Paper strongly recommended reform with residential stamp duty and land tax, which are clear barriers to housing affordability. It’s frustrating that such reforms have again been overlooked.

“Our level of first homebuyers has dropped by a staggering 30% over the past year. These people need assistance.

“Why is it that a house valued at $400,000 attracts stamp duty payable to the Government resulting in an extra payment of $32,000 in interest over the life of the loan? Who benefits from this?

“Stamp duty discourages South Australians from buying and selling property and is a barrier to older people downsizing from the family home. We want more people of all ages to buy houses that suit their needs.”

Mr Walsh says land tax continues to be a barrier to developers holding sufficient land in readiness for projects of suitable scale: “The urban development industry is disappointed that there have only been minor changes to the land tax thresholds,” he said.

“And any payroll tax improvements for small businesses should be welcomed. It all helps employers to create more jobs.

“Whilst the UDIA has reservations about the reluctance of the State Government to strongly embrace change, our industry nevertheless notes the shift from the Government to assist small and medium sized business which will assist in creating jobs. 

“Now the Government must reduce its cost of operating its various departments and agencies.”

Established in 1971, the UDIA (SA) represents the interests of the development industry in South Australia in collaboration with all levels of government. It represents all sections of the urban development sector, including developers, councils and service providers such as engineers, planners and surveyors. As the fifth largest contributor to output in SA, the property development industry employs 56,000 people or 7% of the State’s total workforce, and accounts for almost $9 billion or 12% of Gross State Product.

FURTHER INFORMATION:  Please contact
UDIA (SA) Executive Director Terry Walsh on 0408 704 790