Ballina Electorate Media Releases
IPART Recommendation To Increase Land Tax Will Worsen Housing Crisis ( 19/06/2008)
The IPART recommendation to increase the amount of land tax collected in NSW will worsen the current shortage of affordable housing, hurt struggling small businesses, farmers and homeowners, Member for Ballina and Shadow Minister for Small Business, Don Page said today.
“Land tax is exacerbating the housing crisis in NSW by discouraging people from investing in property, especially rental property. Other more attractive investments such as shares do not attract land tax,” he said.
The NSW Government collected $1,955million in Land Tax for the 2006/07 financial year. This represents more than 12% of the total revenue collected by the NSW Government in that year.
In its review of NSW State Taxation, IPART has recommended:
‘In the long term, the Government should develop a strategy for increasing property holding taxes (for example, broadening the land tax base, increasing the land tax rate and/or increasing municipal rates on land values)…’
In recommending the broadening of the land tax base the report discusses the advantages of putting land tax on all residential owner-occupiers and rural landholders.
“Land tax should not be levied on every household or on rural properties. Homeowners and primary producers are doing it tough already. They do not need a new tax,” he said.
“The Government must look at ways to reduce its reliance on land tax - not increase it,” Mr Page said.
“As fewer people see rental property as a desirable investment because of land tax, there will be less stock available to rent. This drives rents up in available rental accommodation, worsening the current affordable housing crisis.
“In our current housing crisis, the State Labor Government should be doing more to increase property investment. Increasing land tax will have the opposite affect,” he said.
“Increased land tax will also impact negatively on businesses in NSW. Many business premises attract land tax, which has to be paid by either the owner or the tenant. Either way it’s an extra impost on business they cannot afford,” he said.
“Whether businesses own their own premises or are renting, an increase in land tax will impact negatively on them.
“I believe that the IPART recommendation to increase land tax is flawed and is not the way to solve the problems facing NSW in relation to the housing crisis and the burden of tax on business, farmers and householders,” Mr Page said.
