Vendor tax axed
By DAVID MOASE
REAL estate investors in New South Wales are now on an even footing with the rest of the country following yesterday's decision to abolish the NSW Government's much criticised vendor tax, according to local real estate agent Rodger Pryce.
Champagne corks could be heard popping across the Coffs Coast after newly elected Premier Morris Iemma announced the immediate axing of the tax.
Mr Pryce, the principal of NSW Real Estate, described the 2.25 per cent charge on investors selling property, as 'one of the worst decisions politically ever made'.
"I don't believe the decision to abolish the tax will take the market back to where it was because the whole of Australia seems to be facing a correction," he said.
"What it will do is put NSW on more of an even footing with the rest of Australia.
"I'm very relieved it's happened and it looks like the back bench gave the government an ultimatum."
Mr Pryce said 38 per cent of all residential property in the Coffs Harbour area is owned by investors.
The vendor duty was introduced last year by then treasurer Michael Egan on the sale of investment properties and has been widely criticised by investors, unions and the real estate and building industries, among others.
Mr Iemma made the announcement of its abolition after being formally elected as the State's 40th premier at a Labor caucus meeting yesterday.
He said the new law would not be retrospective.
"I announce today that the vendor duty will be abolished," Mr Iemma told reporters.
"(It will be) effective for all contracts exchanged on or after today."
Mr Iemma said the vendor duty was introduced in a very different property market and times had changed.
"A market that was stronger, but times have changed," he said.
"In the current market conditions, vendor duty is a brake on economic activity."
The Edge Coffs Harbour's principal, Jason Burnett, said the tax had punished all types of investors.
"It has hit everyone from big investors to mum and dad investors just trying to build their wealth," he said.
"The vendor tax has also made NSW less competitive with other States, especially Queensland.
"This decision is a positive step and comes just when the market is heading into a good time of year."