Page 3778 - Week 12 - Thursday, 21 October 1993
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This 30-day period, Madam Speaker, together with the 30-day period taxpayers have in which to lodge their documents for assessment after execution, means that taxpayers will still have at least 60 days from execution in which to claim for a refund. That is a fair period, surely. Persons will still be able to enter into conditional contracts. These amendments will simply mean that investors will need to critically examine any speculative investment decision before committing their funds. You do need to be cautious about large investments of this nature. People who are not cautious, people who speculate blindly, are playing a very risky game and may stand to lose quite a lot of money through their stamp duty.
Madam Speaker, the Law Society also stated that stamp duty is a tax on completed transactions. Mr Kaine made a great deal of this as well. The stamp duty legislation imposes duty on the agreement for sale and not on the delivery of property. It is a very important distinction. The reason for this is a simple one, Madam Speaker. Once an agreement for sale has been entered into, the investor then has a legal interest in that property. This interest can be sold to other investors through further agreements for sale. Where, for example, an investor purchases a property off a plan, the interest that the investor has in that property may also be sold, and frequently is, often at a profit and often more than once, before that property is finally built. The Law Society suggests that where the investor's decision does not work out the ACT should continue to refund any duty paid. As I have stated earlier, this is untenable. I think it is inappropriate to continue to ask the Territory's taxpayers to continue to subsidise poor and risky investment decisions.
The Law Society proposes that, to combat these anti-avoidance practices, the commissioner should be allowed the discretion to extend the refund period where there is a bona fide reason for rescission. It is not appropriate to extend the commissioner's discretion in this way, Madam Speaker. The Government is determined to bring abuses of the rescission refund provisions by investors to an end, and there have been abuses. The bona fide reasons which the Law Society would seek to have recognised are simply those practices which the Government has determined should cease. We are clearly in disagreement.
I think that providing the commissioner with the discretion would only open each adverse decision to appeal and the Government's intentions there could be defeated. Members will be aware, of course, that the discretion was extended to the commissioner in respect of people purchasing their principal place of residence. So the home buyer is protected. That protection has been extended because we do recognise that people buying a principal place of residence are often inexperienced in conveyancing matters, as are most of us sitting in this room. You do it only a few times in a lifetime. Additional safeguards ought therefore to be available to people who are buying their own home and where they are unable to complete a contract for genuine reasons. Those reasons could be many, but often they relate to finance. I believe that, by trying to ban or to do away with the profit on speculation, and at the same time protecting the principal home buyer, the Government has taken an important step here in cutting down on tax avoidance and evasion and ensuring that the community as a whole does not have to subsidise these kinds of speculative and risky endeavours by some investors.
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