THE Property Council of Australia has welcomed this month’s announcement that ASIC will review the technical reporting of stamp duty charges by superannuation funds that currently drive tens of billions of dollars of investment away from new Australian homes, commercial and industrial property assets.
The Property Council has long underscored that the stamp duty disclosure requirement under ASIC’s Regulatory Guide 97 (RG 97) has discouraged investment into the delivery of new city assets.
This is because of the disproportionate impact those unavoidable taxes have on the reported fees and costs of funds.
A simple and zero-cost change to stamp duty reporting requirements under RG 97 could see close to $10 billion flow towards new supply within a few years.
That means up to 35,000 additional new homes for Australians to own and rent over the next five years, at zero cost to government.
Property Council Chief Executive Mike Zorbas welcomed the strong progress through the Government’s Economic Reform Roundtable framework.
“The announcement shows the Government’s productivity drive is going to help housing by driving zero-cost, high-benefit improvements to regulation,” Mr Zorbas said.
“Critically, and rarely amongst federal politicians, the Minister for Housing and Cities understands the importance of institutional investment into the work of Australian companies building and shaping our cities, to give us the housing, offices, industrial parks or shopping centres our growing cities need.
“This is especially important at a time when state governments are carrying heavy debts around the country.”
Mr Zorbas said superannuation funds were currently being penalised for investing our money in Australian housing, offices, industrial parks and shopping malls – all vital to world-class, productive cities.
“ASIC is to be commended for reviewing the current rules, which make super funds’ housing investments look more expensive than they are. It creates an uneven playing field,” he said.
“Changing RG 97 won’t cost the Budget a cent, but it can help deliver 35,000 additional new homes for Australians over five years.
“We can hope too, that the Government takes this mindset into improving the investment pathways for institutions wanting to co-invest with Australian companies through the FIRB process, which has slowed down in recent years.”
The Property Council made itclear that stamp duty should still be reported. However, to improve comparability between assets, it should be reported separately as the unavoidable tax it is, rather than a fee.
WHAT IS RG 97
RG 97 concerns fees and costs disclosure requirements of the Corporations Act and Corporations Regulations, as modified by ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070.
RG 97 requires the disclosure of a Fees and Costs Summary, which includes the disclosure of Administration Fees and Costs, Investment Fees and Costs and Transaction Fees and Costs.
