"Retirees slogged by nest egg tax"

Mark Skelsey and Lillian Saleh, NSW Daily Telegraph, 15 February 2005

RETIREE Ron Grasso is hardly a silvertail - he has a weekly $20 grocery bill budget and struggles to afford a night out at his local club.

But Mr Grasso, 72, of Bexley, is a prime example of a victim of the Carr Government's land-tax grab.

Mr Grasso bought a Bexley unit five years ago to supplement his retirement income -- after working for 45 years.

Last week he received a $457 land-tax bill in the mail.

With his meagre income, which includes a reduced pension because of his property holding, he does not know how he will pay the bill.

"I work for 45 years -- and then get a kick in the bum," he said yesterday.

It's the first time Mr Grasso has paid land tax, courtesy of the Government's decision to remove the tax-free threshold.

Yesterday, Premier Bob Carr refused to backdown on the controversial tax.

Mr Carr said people would need to wait for next year to get lower land tax, caused by weaker valuations since July last year.

"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," Mr Carr said.

He said the Government's property tax reforms, including the land-tax changes and investment property sales tax of 2.25 per cent, were worthwhile.

"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."

Latest NSW Treasury figures show that land tax will raise $1.448 billion, which is only $93 million more than last year.

The new land-tax scales will see the wealthiest property owners see their top rate fall from 1.7 per cent to 1.4 per cent, while battlers like Mr Grasso will be paying land tax at 0.4 per cent for the first time.

Opposition Leader John Brogden said new figures showed the taxes were grinding the real estate market to a halt.

He said the number of properties sold on Saturday was 37, compared to 72 properties on the same day last year.

"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," he said.

Mr Grasso worked as a furniture salesman and store manager before retiring at age 64.

Mr Grasso rents the unit out for $220 a week, of which $40 goes in agents' fees and more disappears for maintenance, water bills and rates.

He claims only a $53 a fortnight pension.

Mr Grasso is a member of two clubs, St George Leagues and a local RSL, but he "can't afford to go there".

Mr Grasso said he could only afford $15-$20 a week for groceries and his credit card was at its limit.

"I'll have to cut back on my living expenses to pay the land tax. I don't know what else I can do. I'm trying to do the right thing by saving the Government money, but this is the thanks I get," he said.

Retired chicken farmer Michael Pace has been hit with a $5840 land-tax bill, after his Schofields house had its valuation double from $380,000 to $760,000 in one year.

"I retired early and didn't want to bludge off the Government, this house is my superannuation," he said.

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