Page 347 - Week 02 - Tuesday, 14 February 2017
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Also, housing affordability is a very important issue. It will make a very tiny positive impact on housing affordability; so the Greens are happy to support the bill today.
MR BARR (Kurrajong—Chief Minister, Treasurer, Minister for Economic Development and Minister for Tourism and Major Events) (11.03), in reply: I thank members from all sides of the chamber for their support of this legislation today. The government is committed, of course, to continuing the ACT’s tax reform progress. We want to reform our tax system to make it more efficient and continue to serve Canberrans well.
Our plans are to build a modern tax system that is fit for the times. It goes, of course, beyond our long-term reforms to land tax. The Revenue Legislation Amendment Bill 2016 (No 2), as we have heard, introduces an innovative new way for people to pay stamp duty when they purchase a property in the city.
Like our other tax reforms, this new barrier-free model is an Australian first, Madam Assistant Speaker. It removes the payment of duty from the middle of the property transaction to the end of the process after settlement has occurred. This means that the requirement to pay duty will not contribute to the time it takes to complete a property transfer.
Under the current arrangements, a contract cannot be settled until duty is paid, which usually takes between five and 10 working days. This reform also reduces the number of interactions with government, because the required documents can be lodged with the Land Titles Office as part of the process to register the land title. The Revenue Office does not become involved with the transaction until after the title is lodged for registration at the Land Titles Office after settlement.
The Revenue Office will use the information to issue an assessment without needing to contact the taxpayer twice. Concession eligibility will be assessed at the same time, and this reduces processing times. The barrier-free model delivers many benefits for the community. In addition to cutting red tape and turning transactions around faster, the model also allows for the point of taxation to be postponed to the latest possible date. This gives taxpayers the cash flow benefit of paying at the latest possible opportunity, reducing their borrowing and financial pressures.
This particularly benefits purchasers buying their homes off the plan, who often have a very long time frame between exchange and settlement of contracts. Under the barrier-free model they will not have to pay stamp duty until after they have settled on the property. We know that many of those who buy off the plan are first home owners taking that first important step into the property market. This reform will ease the up-front cost burden of doing so.
I must say at this point, though, that the ultimate way to remove that burden is to abolish stamp duty. The ACT is the only government in this country removing stamp duty from all property transactions. We are doing this in a phased way over a period of 20 years, but we are now more than a quarter of the way through that process.
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