21 January 2014

Brendan stamps his tiny feet on stamp duty

21 January 2014 | johnboy

For a man with no real power the Liberals’ Brendan Smyth uses the word “must” rather a lot.

In this case he’s telling the government to eat crow over their incompetent stamp duty fiasco:

The ACT Labor government must take every possible step to make sure homeowners are fully compensated after accepting that some of its stamp duty claims were illegal. The government must also rule out introducing retrospective legislation to avoid paying the stamp duty back to affected homeowners, Shadow Treasurer Brendan Smyth said today.

“Finally the government has eaten humble pie and won’t proceed with this expensive legal case in the High Court. The ACT Labor government must now do the right thing and make every possible attempt to contact the possibly hundreds of homeowners entitled to have their stamp duty refunded, and then promptly deliver those refunds,” Mr Smyth said.

“If a group of Canberrans had been found to be defrauding the government on stamp duty I’m sure there would be no hesitation by ACT Labor in setting up a taskforce or doing whatever it had to do to catch them. Now the government must set the same standards for itself.

“Andrew Barr must also put affected peoples’ minds at ease by guaranteeing that retrospective legislation won’t be introduced to cover the government from paying the stamp duty back to customers.

“Furthermore, the government must detail whether interest will be paid on the funds illegally collected and also put in place procedures to make sure these circumstances don’t arise again.

“The government has the records of the Canberrans who could be entitled to a refund on stamp duty after surrendering this court case. It needs to be proactive and give the money back it has wrongly charged,” Mr Smyth concluded.

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davo1013:15 pm 24 Jan 14

HiddenDragon said :

I assume the 11 year mean is skewed by investors, speculators, flippers, serial upgraders, pollies whose tenure is more marginal they realised, etc. etc.

It depends on what you mean by “skewed”. Normally when you talk about the mean being skewed by some group it’s those in the long-tail (such as Gina is skewing the mean household wealth of WA or Lauren Jackson is skewing the mean height of women on this bus), so in this case it’s those that hold onto their properties for very long periods that are skewing the mean. I saw a stat the other day that suggested that ~20% of households have been in their current home for more than 20 years; on the other hand RP Data have some numbers suggesting the average hold time is 7-9 years.

chewy149:40 am 23 Jan 14

rommeldog56 said :

Full of dredges, contributors pushing vested interests, ill informed and often selfish/ignorant comments. Riotact has much to offer as a change agent, but will never reach that.

This made me laugh profusely. Honestly, reread your own comments and see who is pushing their own vested interests with ill informed comments. These policies will end up costing me personally more money over the long term but they are the right thing to do for our city and economy which is why I support them.

If you accept that the government needs to make revenue from land then higher rates/land taxes are the most efficient form of doing so and the best way to make sure the land is utilized more effectively.

Yes it’s unfortunate that older people may have to move in the future if they cannot afford to pay for the high value land they are on but really this isn’t a bad thing. This policy will actually make it easier for empty nesters, divorcees, retirees and anyone else who needs to move to do so. This increased mobility is good.

Some short term pain for a few people but long term gain overall for everyone.

Now, how about you provide some reasons why this is a bad idea other than “I don’t want to pay”.

JC6:58 am 23 Jan 14

rommeldog56 said :

There is just so much wrong with the logic in the postings in this thread by chewy14, davo101 and JC that it is pointless trying to put an alternate view. Time will tell. According to you guys, we should just disown a house holder when they reach retiring age should we and force them into a smaller place, whether they want to or not.

Why not send those greedy, ageing, already paid their conveyancing Stamp Duty, home owning Bs direct to a Gov’t retirement home ?

Get rid of them and redistribute the extra revenue the ACT Govt will get (because they have already paid conveyancing Stamp Duty) to make everyone else’s life in the ACT nicer. I think Stalin had similar views.

In any event, as a relative newbie to Riotact, this forum has already lived up to its reputation.

Full of dredges, contributors pushing vested interests, ill informed and often selfish/ignorant comments. Riotact has much to offer as a change agent, but will never reach that.

I need to go take my Chill Pill now…….or can anyone recommend a place to go to get a full frontal lobotomy so that I can contribute in a more meaningful way to Riotact ????

I’ll leave u to it.

Hang on a sec, why are you putting me on this list? I have not said a word about whether I support the abolishment of stamp duty or not.

If you read the article and what it is talking about, it is talking about the recent stamp duty ruling for the couple in Crace, that is what I though you were talking about too with your incompetent claim. I still stand by my statement that what the ACT Government did in this case was right, so hardly incompetent.

Now that said stamp duty is a crock of s*** form of taxation Why should you get charged once to move house, or to buy a car etc? Surely a different system is required and rates unfortunately are about the only logical way to charge these.

Now of course it does make it hard on those that have already paid stamp duty, but if you have another suggestion how about putting it up.

PS your comment “Full of dredges, contributors pushing vested interests, ill informed and often selfish/ignorant ” made me laugh. Now whilst what you said in the line is 100% spot on, may I suggest you go take a look in the mirror rather than taking a chill pill and then come back and join us as you will fit right in.

HiddenDragon12:44 am 23 Jan 14

rommeldog56 said :

There is just so much wrong with the logic in the postings in this thread by chewy14, davo101 and JC that it is pointless trying to put an alternate view. Time will tell. According to you guys, we should just disown a house holder when they reach retiring age should we and force them into a smaller place, whether they want to or not.

Why not send those greedy, ageing, already paid their conveyancing Stamp Duty, home owning Bs direct to a Gov’t retirement home ?

Get rid of them and redistribute the extra revenue the ACT Govt will get (because they have already paid conveyancing Stamp Duty) to make everyone else’s life in the ACT nicer. I think Stalin had similar views.

In any event, as a relative newbie to Riotact, this forum has already lived up to its reputation.

Full of dredges, contributors pushing vested interests, ill informed and often selfish/ignorant comments. Riotact has much to offer as a change agent, but will never reach that.

I need to go take my Chill Pill now…….or can anyone recommend a place to go to get a full frontal lobotomy so that I can contribute in a more meaningful way to Riotact ????

I’ll leave u to it.

There will always be keen advocates for the replacement of stamp duty by higher rates and land taxes, including, perhaps, some people who are currently opposed to it, or at least sceptical about it, but as the annual increases somewhat in excess of CPI (and thus of the income increases, if any, which most can look forward to) roll on, I expect the balance will shift, and more of those who are currently relaxed about the change will be less so – particularly with growing pressures on other costs of living.

That said, I don’t see much real choice between Labor/Green and the Liberals on this issue, because I have yet to hear any public comment from any of them which suggests that they see a need for a fundamental look at the size and scope of ACT Government spending. All the thinking (such as it is), all the talk, spin etc. in this town seems to be about spending, regulating and revenue raising (of which the recent thread on this site about toll roads was an interesting and, in some respects – compulsory GPS!? – slightly chilling, example) – which is why I think Davo101’s comment at 3.04pm is pretty close to the mark.

rommeldog5611:15 pm 22 Jan 14

There is just so much wrong with the logic in the postings in this thread by chewy14, davo101 and JC that it is pointless trying to put an alternate view. Time will tell. According to you guys, we should just disown a house holder when they reach retiring age should we and force them into a smaller place, whether they want to or not. Why not send those greedy, ageing, already paid their conveyancing Stamp Duty, home owning Bs direct to a Gov’t retirement home ? Get rid of them and redistribute the extra revenue the ACT Govt will get (because they have already paid conveyancing Stamp Duty) to make everyone else’s life in the ACT nicer. I think Stalin had similar views.

In any event, as a relative newbie to Riotact, this forum has already lived up to its reputation. Full of dredges, contributors pushing vested interests, ill informed and often selfish/ignorant comments. Riotact has much to offer as a change agent, but will never reach that.

I need to go take my Chill Pill now…….or can anyone recommend a place to go to get a full frontal lobotomy so that I can contribute in a more meaningful way to Riotact ????

I’ll leave u to it.

chewy1410:25 pm 22 Jan 14

rommeldog56 said :

Geeezzz, chewy14, you just don’t get it, do you ?

If they weren’t replacing Stamp Duty by excessive Annual Rates increases, then, in the term of my natural life, I wouldn’t have to or need to, move house.

I am a self funded retiree with an annual pension of $38K pa. Like, how in the blazes am I supposed to afford to mpve ?

And why should I – I have worked all my life to get into a position to own my own home and not bludge on Society by having the Age Pension. Now this.

I don’t think that “the vast majority will move houses at some time” – many actually can not afford to.

With that sort of attitude chewy14, is it any wonder we have the Government we have.

It’s no wonder Gallagher/Barr can do what they want to ACT residents.

ACT residents = too apathetic.

Enjoy your higher Annual Rates !

As a retiree on a 950m2 block you don’t think you’ll need to downsize in the future to more appropriate accommodation?
This policy is actually designed to help you do so.

If you don’t think you’ll ever move then you must realise that you’re in a tiny minority and just unlucky that this good reform has come in when it did. Still doesn’t stop it from being a good reform.

Stamp duties are inefficient taxes, they promote the inefficient use of land by making it harder for people to move and by locking up land that could be better utilized by others. They ensure the government has hugely variable revenue from property sales instead of preferable regular income.
Replacing stamp duty with higher rates also promotes the quick release of land and removes the incentive for governments and developers to land bank.

I will enjoy higher rates and all the benefits that come with this massively improved system.

JC6:01 pm 22 Jan 14

rommeldog56 said :

This is just another example of what a totally incompetent ACT Government we have.

Worst ever since self Government – and that’s saying something !

How is the incompetence on behalf of the ACT Government? Looks to me like some cleaver developer found a loophole in the laws to exploit. A loophole that no one knew about until of course it was found and exploited. Also who knows when the loophole found its way into the laws, it may well have been under a Liberal government.

The only possible issue is how the current ACT Labor government has handled this case and how they close the loophole. I cannot see any evidence that they have done anything wrong with the handling of it, they have been through due process and accepted the ruling. What more could you expect? How they handle it from now on is clearly in the future, so unless you have a crystal ball how do you know if they are going to handle it incompetently?

Sound like you are doing a Tony Maggot and saying something in the hope that the sheep will blindly believe without looking at the real facts.

HiddenDragon5:52 pm 22 Jan 14

davo101 said :

Comic_and_Gamer_Nerd said :

LABOR GREENS = TRIPLE RATES

A) LABOR GREENS = DOUBLE RATES + DUTY
B) LIBERALS = DOUBLE RATES + DUTY

Select one from the list above.

Indeed – with A seeming more likely, in the long run (perhaps with an interlude of B) than B.

I assume the 11 year mean is skewed by investors, speculators, flippers, serial upgraders, pollies whose tenure is more marginal they realised, etc. etc. – in which case the claimed trade-off between rates and stamp duty will probably be of marginal benefit for people who see Canberra as their long term home.

davo1014:39 pm 22 Jan 14

Comic_and_Gamer_Nerd said :

davo101 said :

Comic_and_Gamer_Nerd said :

LABOR GREENS = TRIPLE RATES

A) LABOR GREENS = DOUBLE RATES + DUTY
B) LIBERALS = DOUBLE RATES + DUTY

Select one from the list above.

Hey I never saw that sign tied to a trailer on the side of the road so clearly it is not true.

It was in fine print at the bottom of your ballot paper.

davo1014:36 pm 22 Jan 14

rommeldog56 said :

If they weren’t replacing Stamp Duty by excessive Annual Rates increases, then, in the term of my natural life, I wouldn’t have to or need to, move house.

Well that makes you a special case then doesn’t it? The mean time a property in Canberra is owned is 11 years, the time that most properties are owned would be less than this.

rommeldog56 said :

Maybe. Especially now that Gallagher/Barr have done it and got away with it.

A bit early to be calling it with 18 years of the plan left to go?

rommeldog56 said :

Doesn’t make it right though.

The fact that the reform creates losers does not make it wrong either.

chewy141:44 pm 22 Jan 14

rommeldog56 said :

Comic_and_Gamer_Nerd : I have an average home, on a 950sm block in an average Tuggeranong suburb. I purchased my home a bit over 2 years ago and paid $23K Stamp Duty.

My annual Rates will increase by 9.9%pa because of the progressive abolition of stamp duties in the ACT under Gallaghers “Fairer” taxation reforms introduced in the last Territory budget. Essentially, this means that most existing home owners will pay for their conveyancing Stamp Duty at least twice, eventually.

According to Gallagher, ACT Annual Rates are traditionally “indexed” to rise at about 4%pa to maintain services. I accept that as a necessity.

ACT Revenue Office advise that these higher than usual “Fairer” increases to Annual Rates will go for “about” 5 years. They will then drop a little because as stamp duty becomes zero on ACT insurance policies, that lost revenue component will have been made up in the “average” 10% rise to Annual Rates. But, no one can say how much they will drop. My feel is that it wont be much.

So, my 2013/14 Annual Rates (with the 1st installment increase of 9.9%) was $1,798.

Using the 5 year yardstick, my Annual Rates in 2017/18 will be $2,875.

You have to remember that these changes will be “Revenue Neutral” to the ACT Government. So, after 2017/18, it wont be back to the traditional 4% increases because the Govt has a massive deficit to fund and they keep on writing cheques for “projects” there is no funding for. They will have no choice other to keep on dramatically increasing annual Rates.

So, assuming that the 9.9% pa increase is pretty accurate over the next 20 years (which is the period of time that it will take to recoup revenue loss from progressive abolition of conveying Stamp Duty) but admitting that may be a “worst case” scenario, my Annual Rates will be about $10K pa.

I think trippling of my current $1,798 Annual Rates will certainly happen much, much, sooner because of Gallaghers “Fairer” taxation reforms. Sounds “Fair” to me !

Yes, rates may triple over time and some people will be adversely affected, mostly in the short term. However, the vast majority of those people will move houses at some time in the future and if they purchase another house in Canberra, they won’t have to pay stamp duty which will even out the effect over time.

Removing stamp duty and transitioning to higher rates/land taxes is one of the only good policies they have. Instead of trying to hide it, they should use it as a badge of honour. Unfortunately a large proportion of the population are easily deceived by simple slogans and don’t understand the inefficiencies of stamp duty.

rommeldog5610:08 am 22 Jan 14

Comic_and_Gamer_Nerd : I have an average home, on a 950sm block in an average Tuggeranong suburb. I purchased my home a bit over 2 years ago and paid $23K Stamp Duty. My annual Rates will increase by 9.9%pa because of the progressive abolition of stamp duties in the ACT under Gallaghers “Fairer” taxation reforms introduced in the last Territory budget. Essentially, this means that most existing home owners will pay for their conveyancing Stamp Duty at least twice, eventually.

According to Gallagher, ACT Annual Rates are traditionally “indexed” to rise at about 4%pa to maintain services. I accept that as a necessity.

ACT Revenue Office advise that these higher than usual “Fairer” increases to Annual Rates will go for “about” 5 years. They will then drop a little because as stamp duty becomes zero on ACT insurance policies, that lost revenue component will have been made up in the “average” 10% rise to Annual Rates. But, no one can say how much they will drop. My feel is that it wont be much.

So, my 2013/14 Annual Rates (with the 1st installment increase of 9.9%) was $1,798. Using the 5 year yardstick, my Annual Rates in 2017/18 will be $2,875.

You have to remember that these changes will be “Revenue Neutral” to the ACT Government. So, after 2017/18, it wont be back to the traditional 4% increases because the Govt has a massive deficit to fund and they keep on writing cheques for “projects” there is no funding for. They will have no choice other to keep on dramatically increasing annual Rates.

So, assuming that the 9.9% pa increase is pretty accurate over the next 20 years (which is the period of time that it will take to recoup revenue loss from progressive abolition of conveying Stamp Duty) but admitting that may be a “worst case” scenario, my Annual Rates will be about $10K pa.

I think trippling of my current $1,798 Annual Rates will certainly happen much, much, sooner because of Gallaghers “Fairer” taxation reforms. Sounds “Fair” to me !

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