"Government to keep land tax"

News.com – source: AAP, 14 February 2005

NEW South Wales will neither scrap new land tax rates nor modify the current system, even though it was slugging investors, Premier Bob Carr said today.

Last year, the NSW Government removed the tax-free threshold on properties worth up to $317,000.

Since January 1 this year, the rates have been set at 0.4 per cent for properties with a value up to $400,000, 0.6 per cent on those worth $400,000-$500,000, and 1.4 per cent on values more than $500,000.

Second home buyers and investors have been hit with soaring land tax bills compounded by a sluggish property market.

It was also reported today that investors were having to pay their tax bills based on dated market appraisals, with people paying top dollar for a robust market they no longer enjoyed.

Mr Carr said if the market had softened it would be reflected in next year's market evaluations.

"The evaluations are set as of the July 2004 and if there has been any softening of the market since it will be reflected in next year's evaluations," he said.

"If the real estate value has bounced back that will represent a gain for people."

Mr Carr also defended the removal of the tax-free threshold, saying it enabled the government to abolish stamp duty for first home buyers.

"Our new measures are helping first home buyers get into the market and we are the only state to have done away with stamp duty for them," he said.

"All our property tax reforms have made it possible for us to do this ... and I am proud of that."

Property Council of Australia's NSW executive director Ken Morrison said the vendor tax was hurting ordinary Australians.

"Vendor tax is a failure. It's not meeting its revenue target. It's driving investment interstate and it's hurting thousands of ordinary people," he said.

Opposition leader John Brogden said 510,000 people would pay land tax this year, generating more than $1.4 billion for the Government's coffers.

"These are not wealthy people. They are hard-working people who have invested in property to secure their future and that of their children," he said.

"Not only is the Government slugging mum and dad investors, but the flow-on effect means those who can least afford it are being hit with increased rents."

MAURICI HIGH COURT CASE - JUDGMENT
» Read more

Further Information

For further information contact:

• Simon Singer
• David Singer