Page 3579 - Week 12 - Thursday, 19 September 1991
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So, it is a sound tax. I also support the Bill without the inclusion of a threshold. This issue has been floated by the Real Estate Institute and the Opposition, at one time. It is suggested that it would bring the ACT into line with New South Wales and provide - - -
Mr Jensen: The Liberals did.
MR BERRY: Well, they are the Opposition. There is one group that is the Opposition; there is one group that provides no opposition. It is suggested that it would provide relief for small investors and involuntary landlords. This is not so. Thresholds, by their nature, provide mechanisms for inequity and avoidance, often without specifically targeting the group that they were designed to assist.
The introduction of a threshold by itself would not bring the ACT into line with New South Wales, which has recognised the inequities in such an approach by also introducing aggregation. Under aggregation, each landlord's total interest in land, other than his principal residence, including ownership through companies and trusts, is taken into consideration when deciding how much land tax is payable; that is, tax is calculated at 1.5 per cent of the total value of all taxable land owned above the threshold of $160,000.
I should also point out that the principal places of residence are exempt in New South Wales only if they are less than 2,100 square metres; that is, approximately half an acre under the old measurement. And, of course, the application of a threshold without aggregation in the ACT would result in multi-property owners paying significantly less - - -
Mr Humphries: You would not do that then, would you?
MR BERRY: That is right. It would result in their paying less land tax than an owner of a single large property. For example, an owner of a number of single units or flats would be able to take advantage of the threshold, but an owner of a block of flats would not. The existence of a threshold without aggregation also leads to the application of tax minimisation schemes to take advantage of such thresholds.
So, the threshold and aggregation issues have quite rightly been put aside by members of this Assembly. Aggregation is a complex and manpower intensive process. It would lead to extensive legislative amendment and greatly increase the manual administrative process and compliance effort required.
The Revenue Office has advised that it would require at least five extra staff - an incredible amount of staff - to administer threshold aggregation arrangements, and, of course, the revenue from the tax would be considerably
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