With the potential the NSW Government will need to find around $1 billion to repay home buyers for over-charging them stamp duty, the Real Estate Institute of New South Wales (REINSW) has urged the Treasurer not to “bury his head in the sand” in finalising this month’s state Budget.
“With the Treasurer currently preparing the state’s budget, and with a very real possibility Government will have to refund about $1 billion, it’s reasonable to expect him to lean into the issue,” REINSW CEO Tim McKibbin said.
“REINSW has pointed out the potential error in stamp duty collection based on expert advice. To immediately dismiss this possibility on the basis that no-one has raised the issue previously misses the point. Someone has to be first.
“The Treasurer cannot bury his head in the sand. If Government has collected more stamp duty than it should have, it is an error which must be rectified.
“Government says it regularly consults with tax practitioners but as I understand it, this consultation is one-way. These practitioners do not get to look under the hood. It is time for complete transparency,” Mr McKibbin says.
In the interest of transparency, REINSW is calling on the Treasurer to publish his calculations and interpretation of the applicable law for the following:
(a) The tax brackets between 1st July 2021 and February 2022.
(b) What did Revenue NSW get wrong on the 1st of July 2021?
(c) The calculation of the tax brackets from February 2022 to date.
“Without the transparency consumers require and deserve, it has been necessary for REINSW to reverse engineer the outcome to determine Government’s methodology. That process suggests the refund to consumers is in the ballpark of $1 billion,” Mr McKibbin said.
“It is concerning that Treasury came out immediately to declare its calculations are correct, despite Government acknowledging its original adjusted amounts for 2021-22 were incorrect.
“In these circumstances, it is reasonable to expect Government to have taken a little longer to consider the issue. The application of the legislation is complex and if the interpretation is called into question, then it would be prudent for Treasury to take some time and care before having a ‘spokesperson’ respond,” he said.
Despite its unlimited resources, Mr McKibbin points out Government is not infallible in its calculations and interpretations of the law.
“There is a precedent for error in Government’s property tax collection. Treasury previously applied surcharges to citizens of eight foreign countries who bought and owned homes in NSW before it was later determined, due to double tax agreements with those countries, that those surcharges were prohibited. The issue had to be subsequently remedied by retrospective Federal legislation endorsed by the High Court,” Mr McKibbin said.
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For more information
Please contact Tim McKibbin, REINSW Chief Executive Officer
Mobile: 0415 931 013
[email protected]
About REINSW
The Real Estate Institute of New South Wales (REINSW) is the peak industry body for real estate agents and property professionals in NSW. It represents more than 2000 agencies across residential sales, property management, commercial, strata management, buyers’ agency, agency services and auctioneering. Established in 1910, REINSW works to improve the standards, professionalism and expertise of its members to continually evolve and innovate the industry. It lobbies the government and industry on behalf of members, develops new products and services to benefit agencies and professionals, and offers training and ongoing professional development. For more information, visit reinsw.com.au.