Page 3237 - Week 11 - Thursday, 12 September 1991
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receipts were only 46 per cent of that of the standard States. This is in large part because, unlike the majority of the States, income earning residential properties in the Territory are not subject to land tax.
By imposing land tax on properties, other than the principal place of residence of an owner, revenue estimated at $6.9m will be raised in a full year and $6.3m this year. By broadening the land tax base in this way, the land tax burden is more equitably spread over land used for income earning. It is a source of revenue that the Assembly cannot reasonably ignore at a time of massive readjustment of ACT finances.
While some impact on rental housing might occur, this is expected to be minimal. Some landlords may seek to pass on tax to tenants. However, Mr Speaker, if the landlord is being fair and recovering only the net cost after allowing for income tax benefits, rent increases should, on average, not be more than about $4 to $5 a week. Given that the renegotiation of rents will mostly occur with lease renewals, somewhere over the next 12 months, rent levels will also depend on market conditions at the time. There is absolutely no factual basis for the campaign by the Real Estate Institute, which has tried to frighten tenants with claims of 10 per cent rent increases.
My Government recognises that the increase may have some detrimental effect on low income renters. Rent assistance is available to help those families adversely affected by the tax who have applied for government housing. The Minister for Housing and Community Services will be monitoring the situation to see whether any adjustment to government assistance programs is required.
Mr Speaker, amendments to the Act, therefore, make all rateable land taxable, with specific exemptions being provided for land leased primarily for primary production; land which is used as the principal place of residence of an owner; Commissioner for Housing properties; holding leases granted for developmental purposes; new leases that are unoccupied and have not previously been occupied; and prescribed land.
Provision has also been made to allow a property to retain its exempt status as the principal place of residence during absence of the owner due to the death or illness of any person, for other compassionate reasons or as a result of employment or occupational obligations. During such absences the property may be rented without attracting land tax.
The drafting of these provisions shows that the Government is genuine in seeking to extend the tax only to residential investment properties and not to penalise those home owners who have to rent their home during absences which are beyond their control. The status of property for taxing
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