Page 2658 - Week 08 - Thursday, 14 August 2014
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Again, when we asked what the numbers were on this, it was very hard to see how the calculations came about. It simply sounds like exactly what it is, and that is simply another tax grab from the government that has not done enough to make housing more affordable in the ACT. This will have an impact on that. You have got a government that wants investment in the ACT but you are putting a tax on that. You have got a government that wants greater density in the ACT. Let’s face it, greater density only comes about through the use of units and apartments and more dwellings on a single block. You are putting a tax on that which, of course, forces development into the outer suburbs, which affects the environment.
I thought we were all about a more sustainable environment, but this is another ill-thought out tax that will go along with the lease variation charge and the extension of time fees that really does cast a pall of doubt over the government’s true intentions for the densification of this city.
With that, we will not be supporting the Land Tax Amendment Bill 2014.
MR RATTENBURY (Molonglo) (8.31): This bill was tabled in June as a complement to the budget papers. The proposal in the bill is another step in the taxation reform process that has been underway since 2012. The Greens supported the ALP government’s rates reforms in order to apply a more progressive taxation system.
The bill before us today addresses an issue of inequity that exists currently in relation to land taxes applied to rental properties in the ACT. The current system is based on the average unimproved land value of each property and a marginal rate. This inequity is created by the fact that multi-unit dwellings or apartments, as well as townhouses generally, have a lower unimproved land value than single dwellings or stand-alone houses. Hence a lower marginal rating factor is applied to calculate the land tax paid on those multi-unit properties that are being rented out for often similar rates to single dwellings.
In fact, the situation we seem to have is that the 44 per cent of dwellings that are stand-alone houses are paying about 78 per cent of the land tax revenue, while the 55 per cent of dwellings that are multi-unit only raise about 22 per cent of the land tax revenue. I consider this to be an inequitable system and I think members would agree.
Also, as the city densifies, that inequity will be enhanced. As more multi-unit dwellings are constructed, single dwellings will be contributing proportionally more to land tax. This proposal today instead introduces a fixed charge of $900 per annum to each dwelling as well as applying the marginal rates.
The other change to accompany this is that the marginal rates will be decreased and will be applied more equally across taxable properties. This is intended to make land tax more equitable across property types in the territory. This amendment today brings land taxes in line with the general rates framework where 40 per cent of general rates revenue is generated through a fixed charge and makes our system fairer for everyone. On that basis, the Greens will be supporting this bill today.
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