STOP THE OUTRAGE

Real Estate Institute bosses want to help.

Article originally published MARCH 1, 2004 –Reviewed and approved.

By Neil Jenman

Stamp duty is back in the news. And, as usual, governments are being blamed for ripping off homebuyers. Those two state treasurers, Michael Egan in NSW and John Brumby in Victoria, are again being reviled as the bad guys.

But don’t worry, the good guys are here to help. The heroes from the real estate institutes who want to lower the costs of home buying.

In NSW, Rowen Kelly from the Real Estate Institute points out that with Sydney’s median prices rising 177 per cent, property taxes are now “one of the greatest impediments” for homebuyers and investors.

Good on you, Rowen.

In Victoria, the state with the highest stamp duty rates, Enzo Raimondo from the Real Estate Institute is describing stamp duty as an “outrageous slug”. 

You tell ‘em, Enzo.

Look at the evidence. Melbourne’s median price has risen by 105 per cent in the past five years. But that outrageous stamp duty has risen by 195 per cent.

Yesterday’s Sunday Herald Sun carried the headline “The great Victorian home rip-off”. Enzo is right, this is an “outrage”. And he wants to help reduce the burden for homebuyers. Good on him.

The stamp duty on the median home price in Melbourne is now a whopping $18,000. Although the percentage rate is lower in NSW, higher property prices mean Sydneysiders are also slugged $18,000. That’s just too much.

Mr Kelly and Mr Raimondo are admirably concerned about this huge burden on buyers. It’s unfair. It’s an outrage. Raimondo also said, “People should be able to purchase their own home without having to be milked by the Government.”

Milked by the government. Strong stuff.

Unfortunately, other than strong comments, there is little that Raimondo and Kelly can do to help consumers. They have no control over the amounts of tax “slugged” to homebuyers.

But wait. Maybe there is something.

If they can’t help homebuyers with the outrageous slug of government stamp duty, maybe they can help homesellers with the outrageous slug of agents’ commissions.

Now that’s an idea for guys who care so much for consumers.

Enzo Raimondo says buyers are being milked by the government because stamp duty has risen by 194 per cent. But agents’ commissions have risen by 250 per cent. Surely that means sellers are being milked by the real estate institutes’ agents?

Of course not.

For some reason, stamp duty paid by buyers is not the same as commission paid by sellers. Why not?

Well, one goes to the nasty government who put it back into the community and  the other goes to those nice agents who put it into, well, their nice cars.

Last year, when Melbourne’s newspaper, the Herald Sun, suggested that agents were making too much commission, Raimondo was outraged. He accused the newspaper of having “an agenda to denigrate the real estate profession”, saying that “agents work long hours to achieve a moderate income”.

Raimondo told the editor of the Herald Sun that the story about agents’ commissions, was “the most unprofessional, unethical and irresponsible journalism” he had seen in recent times.

Yes, of course.

When stamp duty increases by 195 per cent, that’s an “outrageous slug”. It means buyers are being milked by the government.

But when agents’ fees increase by 250 per cent, that’s a “moderate income”. It’s fair pay for the hard working agents.

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