Page 1560 - Week 05 - Tuesday, 8 May 2018
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There may be a number of reasons why an owner may have to temporarily take their property off the rental market or why they cannot live in that property. An owner may need to renovate the property. They may be putting in new carpets or painting the walls, which would not be captured under the unfit for occupation exemption.
Alternatively, people may be trying to sell the property. Then, when the first day of the quarter passes and they are slugged with land tax on top of their other selling costs, people should not be forced to pay additional taxes on a property that they are not earning anything on. In effect, the government is trying to penalise people for exercising their rights as property owners to determine what they do with their properties. This is, in effect, an assault on property right.
This will adversely affect a lot of property owners from the first day it is introduced, including mum and dad investors who are doing nothing more than trying to provide for their retirement. It is an overwhelmingly negative, long-term effect for relatively small, short-term gain. If somebody perhaps has moved into a retirement village or into a nursing home and cannot quite bring themselves to sell or rent out the family property, what could it mean for them?
The bill also removes the provision for land tax to be payable for part of a quarter in cases where a property stops or starts becoming rateable. If for some reason your property stops becoming rateable on the second day of the quarter, you would still be forced to pay land tax for three months. It is completely unfair to those taxpayers and these provisions should not go ahead.
My office arranged a briefing on this bill with Mr Barr’s office and at that meeting was told that Treasury’s initial modelling suggested a general figure of between one and 1½ per cent of properties in the ACT were vacant, based on utilities usage. By extending the land tax liability to these properties, the Labor-Greens government will claw an additional $2 million in revenue from Canberrans each year or $6 million across the forward estimates. The Canberra Times has reported that an expected 2,500 properties would be affected by the changes. However, there has been no clear confirmation of actual numbers by the Treasurer.
At that briefing Mr Barr’s office committed to answer further follow-up questions from my office. When my office contacted the Treasurer’s staff last week about when we would receive answers, my office was told by one of Mr Barr’s advisers that answering our questions was not a priority. When we asked for clarification on two points, one of Mr Barr’s advisers refused to provide any further information and directed my office to put their questions on notice after the debate. It is clear that the Treasurer and his staff do not want us looking at the underlying figures in this bill and the long-term impact it will have on our city. My office also posed further questions about the foreign investment surcharge announced in the recent budget review.
Scrutiny report 17 also identified that the evidence provided in the explanatory statement could not justify the changes or support the conclusion that this bill would achieve its objectives of addressing housing affordability issues in the territory.
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