Shadow Treasurer Ed Cocks: “It doesn’t seem to be just a policy flaw in this instance, but a fairly systemic failure.” Photo: Facebook.
The ACT Government has agreed to an inquiry into its stamp-duty exemptions for home buyers after reports emerged it was chasing “thousands of honest Canberrans” for thousands of dollars worth of unpaid stamp duty, as well as interest and penalties, years after it was applied for.
Stamp duty (also known as conveyance duty) applies to any home, land or commercial property bought in the ACT, but under the ‘home buyer concession scheme’, there are a few types of buyers who don’t have to pay it.
These include first-home buyers with an income under $170,000 buying a property under $1 million, pensioners buying a property valued below the median ACT property value, and people with a long-term or permanent disability buying a principal place of residence.
During annual report hearings earlier this year, government officials revealed that it’s up to the taxpayer to ensure they’re eligible for the concessions when they apply – and that the ACT Revenue Office may not check to see if they’re actually eligible until years later.
A questionnaire on the Revenue Office website invites people to “find out if you’re eligible”.
“It’s a self-assessment regime,” ACT Treasury executive group manager Kim Salisbury told the panel in February.
“The taxpayer is responsible for assessing their eligibility … They would do that after consulting our website and also getting legal advice from the solicitor acting on their behalf.”
Shadow Treasurer Ed Cocks described the revelation as “unfair, unreasonable and completely out of touch”, saying it was “an attack on honest Canberrans”.
“Imagine getting government approval for a stamp duty concession, buying your first home, and then – four years later – receiving a massive bill in the mail, followed by government debt collectors,” he said.
In response, the ACT Government admitted that “unfortunately, there have been a number of recent examples of conveyancing agents making incorrect concession claims on behalf of home buyers”.
But it argued the process was similar to “any other tax liability, deduction or concession”, where the Tax Office can “subsequently audit and check information provided and can seek payment of taxation owed with interest and penalties applied where appropriate”.
The spokesperson suggested that home buyers who had been misled about their eligibility for the stamp-duty concession could sue their broker or solicitor for damages.
Mr Cocks moved a motion in the ACT Legislative Assembly today (13 May) asking for the matter to be investigated by the Standing Committee on Public Accounts and Administration.
“It doesn’t seem to be just a policy flaw in this instance, but a fairly systemic failure when people later are receiving significant bills – life-changing bills – and then are having to fight the government to not have to sell their home or take out a second mortgage to be able to pay off that obligation,” he said.
In response, Minister for Finance Rachel Stephen-Smith confirmed the government “will be supporting this motion”.
She added that her office was already in talks with the ACT Revenue Office about toning down some of the language used in the reassessment notices.
“I have been distressed at some of the experiences that have been conveyed to me by people who have received those reassessment notices, and particularly … the language that has been used … and I want to assure the assembly my office has been working with the Revenue Office … about how we consider pathways for people to get further information and support.”
Ms Stephen-Smith also denied Mr Cocks’ claims the Revenue Office relied on applicants to complete an “online quiz” to determine their eligibility, and again compared the process to how the ATO works.
“I do also have to be clear that we can’t have a situation where the Revenue Office is unable to undertake compliance activity and issue reassessments. That is asking for people to deliberately misclaim their concessions,” she said.
“The other thing I would say in relation to assessment upfront is that one of the criteria for eligibility for the home buyer concession scheme is that the person has lived in in the property for 12 months, at least, and that obviously can’t be fully assessed at the time the application … is made.”
However, Ms Stephen-Smith “absolutely” accepted there were many cases where people had acted “in good faith” and “genuinely understood they were eligible” only to have received reassessment notices “out of the blue”.
“This inquiry is a good opportunity to get to the bottom of all these issues, to understand the balance that needs to be struck, but also to recognise the experience of those individuals for whom this matter has caused distress.”
The motion also received the backing of the ACT Greens.
