Page 3768 - Week 12 - Thursday, 21 October 1993
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STAMP DUTIES AND TAXES (AMENDMENT) BILL (NO. 2) 1993
Detail Stage
Clause 1
Debate resumed from 19 October 1993.
MRS CARNELL (Leader of the Opposition) (5.08): Madam Speaker, Mr Kaine spoke eloquently about this Bill earlier this week. It includes three particular amendments. There are two that I would like to speak about particularly. The first one is the refund of duty. Mr Kaine ran through what that would do, but I now have had time to look at the information that the Law Society has given. They certainly have raised a number of fairly important considerations that I think this Assembly should take on board.
They, I think, have rightly said what will happen if we pass this amendment Bill and what it will mean in essence when a developer goes ahead with a new development, as happens regularly in Canberra, say at Kingston or in one of the other areas which are looking at medium density developments - something that this Government embraces. The developer wants to go ahead and start selling the units off the plan, as they do, in an attempt to get finance. The purchaser enters into conditional contracts. Those conditional contracts are conditional upon things like planning approval, which may take something like six months in some circumstances; finance, which could take three months; completion of the building works in a proper and workmanlike manner, something that could take up to two years in some bigger complexes; and various other matters that either the purchaser or the developer may feel appropriate.
There are many things that can go wrong in such a contract. This amendment will mean that the stamp duty, which can be $5,000, $6,000, $7,000, depending on the purchase price of the property, will not be refunded if something goes wrong with the development. We can think of some notable examples around Canberra where a particular development took substantially longer than was originally planned. I can imagine that in those circumstances many of the investors who were looking at buying those units may have had to pull out of their contracts, or felt that another property was better. If this particular amendment is passed the stamp duty that they would have paid - the $5,000, $6,000 or $7,000 involved - will not be refundable. I do not think it takes a genius to realise that that sort of approach will mean that fewer people - in fact I would suggest very, very few - will be willing to enter into those sorts of contracts. Their deposit, of course, is fully refundable, but their stamp duty will not be, and it is a substantial amount of money. If we really are looking at getting investment up and going in this city, if we are looking at encouraging development, if we are looking at encouraging urban infill, here is a very quick way to make sure that it does not happen.
It will not happen, Madam Speaker, because the developer, who will be having an awful lot of trouble selling the units off the plan, will not be able to get finance. It is that simple. Unless you can show that you really have a good deal going, the chances of getting finance are limited. Inevitably, that will mean that fewer developers will be willing to take the risk of having to go right through to completion date without having at least a substantial number of the units sold. This inevitably will cost jobs and certainly will cost development.
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