Land Tax

Question without notice

Ms ARMITAGE question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT, answered by the DEPUTY LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Ms HOWLETT

[3.00 p.m.]

Will the Leader please advise -

(1) What is the rationale for having the minimum threshold for Tasmanian land tax at $25 000?

(2) When was the value of $25 000 set as the minimum threshold to charge landowners land tax?

(3) When was the last review into calculating this minimum threshold?

(4) Has the Government considered, if not abolishing land tax, pegging it to the consumer price index - CPI - as is the case with many other charges, fees and taxes?

(5) Will the Government consider, if not abolishing the land tax, to raise this minimum threshold or lower the tax scale which is applied to taxable land as is the case in many other Australian jurisdictions?

ANSWER

Mr President, I thank the member for Launceston for her question.

(1) The threshold is intended to avoid the administration burden of applying taxation to small land of very low value which would yield minimal revenue for the government services.

(2) This threshold was set on 1 July 2005.

(3) The last review of land tax thresholds was in 2009-10 when amendments were made to the Land Taxing Rating Act 2000. At this time the thresholds within Schedule 1, Rate of land tax, were reduced from four tax brackets to three brackets. The minimum threshold remained at $25 000.

(4) Although minor taxes, fees and charges are fixed to CPI through fee units, the Government does not fix major tax lines such as land tax to CPI which is appropriately linked to the Valuer-General's assessment of market value.

(5) Land tax is an efficient tax, which means the process of charging the tax has a low administrative burden and does not distort people's decision-making and behaviour as much as other taxes. As such, a revision of land tax thresholds and tax rate is not proposed at this time.

In regards to the recent land tax notices, there have been no changes to the land tax schedule since July 2010. The increase in land tax notices reflects an increase in the value of property. Property revaluations occur every six years in Tasmania. Between revaluations, the Office of the Valuer-General applies annual valuation adjustment factors to land. The adjustment factors are based on property sales information, current rental data and a range of relevant market evidence. In times of buoyant real estate conditions, the factor generally increases. The Valuer‑General's valuation adjustments therefore reflect strong property growth in some municipalities.

While the Government appreciates that some landowners are experiencing financial difficulty, adequate measures are already in place to assist landlords. Anyone experiencing difficulty paying their land tax can apply to the Commissioner of State Revenue to defer lump sum payments due to hardship, or arrange to pay their land tax by instalments.

Tasmanian Land Tax - Thresholds

Ms ARMITAGE question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT, answered by the DEPUTY LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Ms HOWLETT

What was the minimum threshold prior to the last review? If you are unable to answer now, I will put the question on notice.

ANSWER

Mr President, I will have to take that question on notice.