The NSW Opposition has committed to referring the state’s stamp duty indexation settings to the Supreme Court, a move the Real Estate Institute of NSW (REINSW) says could determine whether thousands of taxpayers have been overcharged on their property purchases.
REINSW has welcomed the commitment, arguing the potential refunds owed could run into the billions of dollars.
Tim McKibbin, REINSW’s Chief Executive Officer, said the state government’s own refusal to test the question in court was itself telling.
“The NSW Government has ducked and weaved Supreme Court scrutiny of its stamp duty collections. But this issue is not going away,” Tim said.
REINSW has formally asked the Chief Commissioner of State Revenue (CCSR) to refer the question of law on the correct interpretation of the stamp duty indexation provisions to the NSW Supreme Court. It has not received a formal response.
The NSW Minister for Finance addressed the issue in Budget Estimates, saying: “I’m not going to require the court to use its valuable time or the other resources of government to seek clarity.”
Tim said the issue affects everyone who has purchased, or is purchasing, property in the state, and that taxpayers deserve transparency and for the Chief Commissioner to seek the Supreme Court’s advice.
Section 106 of the Taxation Administration Act allows the CCSR to state a case on any question of law concerning the assessment or refund of tax and refer it to the Supreme Court for its opinion.
Tim said the government’s failure to do so points to its own doubts over whether it has overcharged consumers.
“The uncertainty is evident because Revenue NSW has adopted and applied two different interpretations of the provisions since their introduction,” he said.
Tim rejected the government’s cost argument for avoiding the court process.
“Recently, the Minister for Finance reaffirmed Government’s refusal to seek Supreme Court clarification on the issue on the basis of cost. Ironically, seeking the opinion of the Supreme Court would cost less than the legal advice Government has already incurred to date seeking to silence this issue.
Tim said a proceeding under section 106 of the Taxation Administration Act would be the most cost-effective way of being certain of the correct interpretation of the stamp duty indexation provisions.
“This proceeding would take a single day’s court hearing,” he said. “Government’s primary function is to act in the best interests of the people of New South Wales. It is not to defend a position that potentially harms the interests of those people,” Tim said.