This set back was always on the cards, given the technical issues. However, it simply means we must re-double our efforts. The Property Council has already spoken to John Howard and Peter Costello over the weekend. They say stamp duty on commercial property conveyances is still programmed for elimination, but will be delayed because of “short term transition issues”. The Property Council will also meet with the Premiers and State Treasurers all over again.
The aim is to re-store the scrapping of commercial property conveyances to the original timetable. At the very least, stamp duty rates for commercial property conveyances need to start falling by July 2000 with full elimination by 2002. Our argument is that the main losers are the millions of superannuants who have a huge stake in the property industry. Property is a critical asset in diversified investment funds and ‘ordinary’ Australian superannuants rely on its solid yields and stability.
Property alone faces the trifecta of land, transaction and capital gains taxes. At least one should go in order to increase the retirement wealth and self sufficiency of Australians. There are still plenty of pluses for property in the Coalition’s tax package conveyancing lawful especially listed property. Stamp duty on marketable securities, leases and mortgages will still be scrapped. Nevertheless, taxes on underlying commercial property assets need to fall if property is to become a more competitive asset class.
John Ralph’s Platform for Consultation contains positives and negatives for the property industry. On first blush these are: Tax treatment of trusts – (see previous lobbying alert). Ralph’s proposal is better than the Government’s previous plan to tax trusts as companies; however, the right to pass the full value of capital deductions through to beneficiaries remains in jeopardy.