Page 1641 - Week 06 - Thursday, 7 June 2007
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We have had this debate before, and most likely we will have it again. Regardless, the opposition supports this bill. I thank the Treasurer’s office for the briefing that was provided. I appreciate, as always, the professional manner in which the Commissioner for ACT Revenue conducted that briefing and dealt with any of the issues that we raised in those discussions.
DR FOSKEY (Molonglo) (8.38): The Greens will also be supporting the bill. As did Mr Mulcahy, we thank the officers for their briefing. My staff felt fully satisfied at the end of that briefing that this was one of those bills that just made sense in every way.
It is good that action was very quick. It is, of course, a pity that the ACT government is not prepared to see that land tax could be a tool. We still hope, perhaps, for slightly different outcomes from Mr Mulcahy’s, but we do see the potential for land tax to be a tool for increasing affordability of some private rental housing.
Again, it is a sensible bill. We will be happy to see it passed and to move on to the next piece of legislation.
MR STANHOPE (Ginninderra—Chief Minister, Treasurer, Minister for Business and Economic Development, Minister for Indigenous Affairs, Minister for the Environment, Water and Climate Change, Minister for the Arts) (8.39), in reply: This bill is not contentious. It restores the original intention of the Land Tax Act and protects revenue assessed as interest and penalty tax that would otherwise have been put into question.
An owner of a residential property is obliged to notify the Commissioner for ACT Revenue within 30 days if the property is rented. A failure to notify is subject to penalty tax under the Rates and Land Tax Act. As a result of that act being split with the Rates Act and the Land Tax Act, and both of these acts coming under the auspices of the Taxation Administration Act, this trigger for penalty tax inadvertently fell away.
Currently, interest and penalty tax can only be levied when the taxpayer fails to pay their land tax assessment by the due date, with interest applying from the day after the due date. An owner’s failure to notify the commissioner of the rental status may not be detected by compliance activity for years, delaying the collection of tax and penalty and reducing the amount of interest payable significantly.
The matter came to light as an incidental matter associated with an AAT hearing. Up until that point, assessments had been made applying interest and penalty tax where an owner failed to notify the commissioner as if it were a tax default. The practice of levying interest and penalty tax in those circumstances ceased once the inconsistency was detected pending amendment of the Land Tax Act to reinforce the initial policy intent.
The amendments mean that the failure to notify the commissioner within the required time will constitute a tax default, subject to penalty tax, and that interest can apply from 30 days after the land tax liability arises. The amendments will restore certainty of the rigid deterrent to taxpayers who might otherwise disregard their obligation to
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