2014 Federal Budget
Key recommendations from the National Commission of Audit Report would alleviate the property sector bearing the lion’s share of state revenue raising, but Sian Sinclair, National Industry Leader Real Estate & Construction, cautions that Federal Government will need to facilitate any State based tax overhauls to ensure a fair outcome for all.
“The property sector is a significant contributor to State revenue by way of inequitable taxes such as stamp duty, land tax and hidden taxes such as infrastructure charges.”
“Despite being an unattractive proposition for some, the Property Sector welcomes the recommendations that would enable the States to introduce a personal income tax surcharge, on the presumption it will lead to a clean slate for the State tax systems. The removal of inefficient taxes such as stamp duty and an overhaul of land tax exemptions would see a more even distribution of the tax burden. But it’s imperative that the Federal Government oversee the process to ensure a fair position for all and that the States follow through.
“It’s been a long time since the Government has been this frank with us about the current state of Australia’s finances. As a result, the general public are stealing themselves for significant and perhaps unpleasant changes. I would hate to see the response to the report being more about tinkering around the edges without providing any real platform for change”. said Ms Sinclair.
Should the Government adopt recommendations from the report, there are a lot of opportunities for industry players to prepare for.
“Changes to the aged pension asset tests will prevent the anomalies of asset rich pensioners who are currently eligible for benefits, receiving funds that could be distributed more equitably. If implemented, the property sector should expect a flurry of activity as some baby boomers look to downsize.
“The report further recommends better leveraging of Commonwealth land holdings by drawing on the private sector expertise. This is a great opportunity for the sector if it means unlocking land supply and easing pressure on housing affordability.” said Ms Sinclair.
Please don’t hesitate to contact me if you would like me to put you in touch with Sian Sinclair to discuss the concepts further.
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