Victorian Property Taxes, massive reform needed. November 2005 RETURN
Private property owners and small business proprietors are a vital part of our State Economy’s vitality. Providing accommodation to the needy, premises for business, generating massive employment and allowing many to independently fund their own retirement, one would think our authorities would pave the way for their successful participation. Recent State Government proposals reflect a relentless pursuit of funding from the property sector. This year the expected windfall will be $3.2billion and they are looking to increase the take. They wish to bring an excessive amount of property into the Land Tax pool using: a change in council valuation methodology to the highest possible usage as opposed to actual usage; using later valuation years for assessment; and refusing to index thresh holds, allowing bracket creep to occur. An outrageous piece of legislation has been passed to assess stamp duty not just the property but also the interest payable under term contracts. This severely affects very low income earners that could not purchase their own home any other way. Stamp duty is now set at 6% for purchases over $115,000 and acting as a wealth tax for low income earners buying their own home. Land Tax is spinning out of control and not only for the wealthy yet small business owners and investors. It is now illegal for owners to charge tenants for Land Tax as an outgoing. Rents will soar to businesses as a result. Many businesses have already closed because of the massive tax hikes, this has cost thousands of jobs already. It is proposed by the Treasurer to charge up to an extra 400-500% for land tax to property held by certain trusts, and as opposed to a lessor rate paid by any other ownership structure, this is totally discriminatory. Owners of Company Stocks or Shares pay no Stamp duty to purchase and pay no annual taxes yet have no direct contribution to the economy or social service. Alternatively the property man who provides so much is being strangled by the current policies of our State Government. Their defense of such massive imbalance is insulting. If affected we suggest you consult you local MLA and advise your concerns. This situation must be addressed as it severely threatens the very fabric of the property market.
Private property owners and small business proprietors are a vital part of our State Economy’s vitality. Providing accommodation to the needy, premises for business, generating massive employment and allowing many to independently fund their own retirement, one would think our authorities would pave the way for their successful participation. Recent State Government proposals reflect a relentless pursuit of funding from the property sector. This year the expected windfall will be $3.2billion and they are looking to increase the take. They wish to bring an excessive amount of property into the Land Tax pool using: a change in council valuation methodology to the highest possible usage as opposed to actual usage; using later valuation years for assessment; and refusing to index thresh holds, allowing bracket creep to occur. An outrageous piece of legislation has been passed to assess stamp duty not just the property but also the interest payable under term contracts. This severely affects very low income earners that could not purchase their own home any other way. Stamp duty is now set at 6% for purchases over $115,000 and acting as a wealth tax for low income earners buying their own home. Land Tax is spinning out of control and not only for the wealthy yet small business owners and investors. It is now illegal for owners to charge tenants for Land Tax as an outgoing. Rents will soar to businesses as a result. Many businesses have already closed because of the massive tax hikes, this has cost thousands of jobs already. It is proposed by the Treasurer to charge up to an extra 400-500% for land tax to property held by certain trusts, and as opposed to a lessor rate paid by any other ownership structure, this is totally discriminatory. Owners of Company Stocks or Shares pay no Stamp duty to purchase and pay no annual taxes yet have no direct contribution to the economy or social service. Alternatively the property man who provides so much is being strangled by the current policies of our State Government. Their defense of such massive imbalance is insulting. If affected we suggest you consult you local MLA and advise your concerns. This situation must be addressed as it severely threatens the very fabric of the property market.