Page 1715 - Week 05 - Wednesday, 15 May 2019

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(3) the challenges facing the residential property sector in Canberra, including:

(a) rates;

(b) land taxes;

(d) bank valuations;

(e) bank lending criteria;

(f) cost of land; and

(g) delays, complexity and certificate of occupancy issues in the planning system;

(4) further notes the risk of Labor’s negative gearing changes; and

(5) calls on the ACT Government to:

(a) publish all modelling undertaken about the future of the property sector in Canberra; and

(b) detail the known impact of Labor’s proposed housing policies.

It is absolutely vital that we have a strong property sector in the ACT, but unfortunately this property sector is under attack from the ACT Labor government, and that risks being compounded if we get a Bill Shorten federal Labor government.

The problems in the ACT are manyfold. We have the outrageous rates regime that has put a huge burden on many Canberra households. In addition, we also have the onerous land tax regime that is, in effect, a rent tax. It gets paid on rental properties; therefore, it is highly likely it will be passed on to renters. Land tax and the huge gouge we see in this space by the ACT Labor government is, in effect, a rent tax.

We also have the problem of the ACT revenue office overvaluing properties. In the past the changes to the rates regime have been about increasing the multiplier, increasing the percentage of the value of your property that you pay in rates. But now the revenue office is increasing the value of your land as well. So not only are you paying a higher percentage but it is off a higher base, meaning you are getting hit twice.

At the same time as the revenue office is overvaluing properties, banks are undervaluing properties and making it even harder to get finance, should you want to borrow. Further to that, the lending criteria of banks are also having a very serious negative impact on the availability of credit in the ACT. People who thought they could buy a $400,000 unit may well find when it comes time to settle in 12 or 18 months that the bank only values it at $350,000 and they have got to make up the shortfall.

There are real concerns that many people in Canberra will be throwing away their deposit because they cannot make up the difference between the bank’s valuation and that of what they purchased. When you add in to that changes to the lending criteria of banks, such as that they will now only lend 75 per cent rather than 85 or 90 per cent,

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