Page 1020 - Week 03 - Thursday, 21 March 2019
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efficiencies in tax collection and administration by identifying and correcting minor technical inconsistencies to support the overall integrity of the territory’s revenue system.
As has just been discussed, the bill also supports housing affordability in the ACT through the introduction of a land tax exemption as an incentive for more affordable community housing. The bill provides the basis for a pilot program to incentivise more private landlords to rent properties at affordable rates for low income Canberra households. It creates the framework to provide a full land tax exemption for owners who rent their properties at below market rates through a registered affordable housing provider. This exemption supports an important objective of the ACT housing strategy, particularly to provide affordable rental housing for people who do not qualify for public housing but who struggle to find affordable rental accommodation in the private rental market.
Importantly, eligibility criteria for the exemption will be determined by disallowable instrument when the bill commences. This will indicate that a qualifying property must be rented at less than 75 per cent of market rent and be accessible to tenants in the bottom two income quintiles. A maximum of 100 properties will be eligible to access this incentive during this initial pilot. In this context I will move a government amendment in the detail stage to clarify the intended cap of properties that may take up this land tax exemption. The scheme is being run as a pilot initially and funding has been set aside to provide two years worth of incentives. It will be evaluated; after the first year would appear to be a logical time to do so. There will be scope to extend the scheme if it is achieving the goals that we as an Assembly have collectively set for it.
In addition to supporting more affordable rental housing, the bill also allows for more flexible options for the recovery of outstanding tax debts that leverage existing mortgage arrangements. This will help people who have a debt to the territory to better manage, control and prioritise repayments before they escalate to a stage where stronger options of garnishee arrangements or the sale of the land are needed. These changes balance the need to ensure that defaulting taxpayers are meeting the same obligations as their neighbours, whilst ensuring that any action taken under these amendments provides opportunities at different stages to take stock of an individual’s situation and for the taxpayer to make payment.
These measures, as has already been mentioned in this debate, will bring the ACT into alignment with the approach used in other parts of Australia—for example, New South Wales and Victoria. The bill also reduces the penalty tax rate for tax defaults to 25 per cent, whilst retaining a higher 50 per cent rate for some limited circumstances such as repeat tax defaults. This will encourage compliance with the law while bringing the ACT’s penalty tax system in line with other jurisdictions.
I table a revised explanatory statement in response to the comments from the scrutiny committee regarding the operation of these penalty tax changes. The revision makes clear that from 1 July 2019 the 50 per cent rate will apply to tax defaults if the commissioner is satisfied that the circumstances warrant this, whether the tax default happened before or after 1 July 2019. Under the new arrangements, when determining
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