Vendor duty is to be abolished
02 August 2005Vendor duty will be abolished from 2 August 2005.
New South Wales Premier-elect Morris Iemma made the announcement after being formally elected at a Labor caucus today. Mr Iemma will also become the state’s next treasurer following the resignation of Dr Andrew Refshauge earlier today.
Since the announcement of its introduction in April 2004, vendor duty on land-related property has been widely criticised by the property industry and investors. A report on the tax by Access Economics, commissioned by the Property Council of Australia, described vendor duty as the state’s most inefficient tax, and ‘a very clear case of bad tax design, both qualitatively and quantitatively’.
Vendor duty will be abolished for all contracts entered into on or after 2 August 2005. Anti-avoidance provisions will be introduced to prevent persons avoiding vendor duty by cancelling and substituting contracts that were exchanged before the announcement.
Although the announcement does not specifically mention land-rich vendor duty, we understand that this will also be abolished.
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