Page 2726 - Week 07 - Thursday, 2 August 2018
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property market, and how that affects housing affordability for local residents and (i) how the ACT Government will measure and monitor the effectiveness of these changes to land tax as they relate to housing affordability.
Mr Barr: The answer to the member’s question is as follows:
(1) The Land Tax Amendment Bill 2018 (the Act) implements two initiatives:
• applying land tax to properties which are not the owner’s principal place of residence; and
• the introduction of a foreign ownership surcharge.
From 1 July 2018 land tax will apply to all residential dwellings that are not the owner’s principal place of residence whether they are rented or not. This initiative is aimed at increasing the number of residential properties available for rent. Properties left vacant by the owner will now attract land tax.
A foreign ownership surcharge will apply to foreign-owned residential property from 1 July 2018. The charge will be 0.75 per cent of the property’s average unimproved value and is aimed at improving local home buyers’ competitiveness in the Territory housing market.
The anticipated effect of the amendments to the Act is based on the application of supply and demand principles, rather than empirical modelling. The amendments to the Act are one element of a broad range of housing and homelessness related initiatives that will form part of the Housing Strategy which will be released later in 2018.
(2)
(a) See answer to part (1).
(b) See answer to part (1). As part of the analysis of the amendments to the Act, it was estimated around 2,500 residential dwellings are vacant in the ACT over a 12 month period.
(c) See answer to part (1).
(d) See answer to part (1).
(e) See answer to part (1). As part of the analysis of the amendments to the Act, it was estimated around 200 to 300 foreign investors would be impacted based on information from the Foreign Investment Review Board annual reports.
(f) See answer to part (1).
(g) See answer to part (1).
(h) See answer to part (1). Interstate property investors will not be subject to the foreign ownership surcharge and were not analysed as part of these amendments.
(i) As noted in part (1), the amendments to the Act are part of a broader strategy to address housing affordability in the ACT. Housing affordability is closely monitored by the Government through a number of indicators on housing costs relative to incomes across different income groups which will be used to assess the effectiveness of the strategy as a whole over time.
Land—tax
(Question No 1353)
Mr Coe asked the Treasurer, upon notice, on 11 May 2018:
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