Rei Condemns Trust Funds Hike
Newcastle Herald
Friday September 5, 1997
THE Real Estate Institute of NSW has expressed its dissatisfaction with last week's announcement by the Minister for Fair Trading, Ms Faye Lo Po', that the proportional interest rate remission on real estate agency trust accounts would increase from 25% to 60%.
According to the organisation's president, Mr Stephen Francis, the increase will take effect from November 1 and is estimated to provide the department with an additional $14.4million.
The interest rate applies to the proportion of current market interest paid by the banks and building societies to the department.
The institute has called on Ms Lo Po' to give a commitment that the increased revenue be applied to initiatives of direct benefit to the property sector.
`The Real Estate Institute has consistently opposed any movement from the existing 25% level,' Mr Stephen Francis said.
The funds held in agents' trust accounts were not public monies and should not be available for conscription by the Government as a revenue-raising exercise, he said.
`Agents' trust accounts largely operate free of transaction fees and charges despite a high volume of transactions,' Mr Francis said.
`This has been of direct benefit to property consumers as these fees and charges would be passed on to clients and could filter through into higher rents paid by tenants.'
The income derived by the Department of Fair Trading from agency trust accounts had consistently been in excess of the operating requirements of the former Property Services Council and for the maintenance of the industry's compensation fund.
`The institute is strongly of the view that these funds should rightfully be regarded as the the property of the vendors, purchasers, landlords and tenants of this State.'
The real estate institute believes that additional revenue should be returned either directly or indirectly to the property sector.
© 1997 Newcastle Herald
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