"Pressure mounts on land tax"

Anne Davies, State Political Editor, Sydney Morning Herald, 4 May 2005

NSW was under more pressure to restore the tax-free threshold for land tax after the Victorian Government lifted its threshold from $175,000 to $200,000, the Opposition said yesterday.

Almost the entire Victorian budget was leaked to the Nine Network on Monday night, ahead of its delivery yesterday.

The shadow treasurer, Peta Seaton, said Victoria's Labor Premier, Steve Bracks, had thrown down the gauntlet.

"We are headed for higher unemployment and a flight of capital across the border to Victoria, where the investment climate is more attractive," Ms Seaton said.

The land-tax cut in Victoria would give Victorians with a land value of $200,000 an $800 head start over investors in NSW, she said.

The NSW budget is due to be delivered on May 24. The Treasurer, Andrew Refshauge, has said that last year's broadening of land tax to catch all second properties and the new vendor tax payable when properties were sold were under review.

Dr Refshauge is believed to be considering options including restoring a threshold, or reducing the rate of land tax for properties with a land value below the previous threshold of about $320,000.

In Parliament yesterday he defended the land tax regime. He referred to the 1.9 per cent rise in the number of dwelling units approved in NSW in March, the fifth consecutive monthly rise. The trend estimate for total dwellings in Victoria had risen 0.3 per cent in the latest month after declines in the previous 16 months, he said. But the seasonally adjusted figures for NSW - as opposed to the trend - showed a 29.1 per cent slump in approvals.

The Treasurer said the NSW land tax system compared favourably with other states and had the lowest top marginal rate of any state that levied land tax.

"Our top rate of 1.4 per cent compares with 4 per cent in Victoria and 3.3 per cent in Queensland," he said.

"According to [federal Treasurer] Peter Costello, NSW should be raising more revenue through land tax."

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