Stamp duty, one of New Zealand's oldest taxes, has been scrapped. Introduced in 1867, it initially covered all sorts of transactions but on its demise applied only to commercial property and farm sales.
Federated Farmers calculated its cost at $2586 a farmer a year. The lost revenue to the Government willbe $77 million a year. The Government said removing the "dead hand" of stamp duty would help move around billions of dollars of investment capital tied up in farms.
Refunds will be available where duty has been paid to Inland Revenue but settlement has not yet occurred. That will not apply on agreements executed more than eight years ago.
The Property Council welcomed the abolition, saying the duty penalised one investment sector. Provision for estate duty, not applied since 1992, will also be removed from legislation. Treasurer Bill Birch said it had no place in the modern economy.
And the Government will look at opening conveyancing to non-lawyers and, in turn, allowing lawyers into the real estate business. Its action has been prompted by Labour MP Phil Goff's planned Conveyancing Bill.
Mr Birch said that scrapping the real estate agents' monopoly could lead to their commissions being cut from 4 per cent to 3 per cent - bringing New Zealand into line with Australia and saving buyers about $1700 on an average $170,000 home.
Commissions have not been fixed for years and vendors negotiate them with the agents. Agencies generally try to charge a base fee, 4 per cent on the first few hundred thousand dollars and a lower rate above about $400,000.
Labour's finance spokesman, Michael Cullen, said the abolition of death duties was an appropriate memorial for a dying Government. - Vernon Small
