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Land valuations - SMH 24 Jan

Discussion in 'Accounting, Tax & Legal' started by NickM, 24th Jan, 2007.

  1. NickM

    NickM Co-founder Staff Member

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    This article shows yet again how the NSW State Govt is ripping off taxpayers ! :mad:
     

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  2. Jacque

    Jacque Team InvestEd

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    And it's this section of the article that is the most worrying:

    "The Government has collected $680 million more in land tax over the last four years than it
    budgeted for, which amounts to taxation by stealth," Mr Singer said. "Investment returns will
    be eroded and tenants will have their rents increased to meet this huge unexpected burden."
    Complaints over erratic spikes in land valuations prompted the Government to switch from this
    year onwards to three-year averaging of land valuations. This includes the 2004 spike, when
    the Valuer-General increased residential, commercial and industrial land valuations by an
    average 23 per cent.
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    How clever of the NSW tax collectors to introduce a three year average when real values have been falling for the last two years!! This effectively means that drops in land values in 2006 mean that some land tax payers will face a larger assessment under averaging compared to a single-year valuation.

    Interesting then that the very example provided on the OSR site (see here: Land tax rates ) conveniently ignore the current real state (of falling values, not rising) when calculating the average land tax payable. They have increasing values to make it appear like a fairer tax!
    Let's consider, instead, a more real life example:

    2007 land value $450,000 (land value as at 1 July 2006)

    2006 land value $480,000 (land value as at 1 July 2005)

    2005 land value $550,000 (land value as at 1 July 2004)


    Total = $1, 480,000 divided by 3
    Average land value = $493,000

    Hmmm..... makes your blood boil, doesn't it?!!

    I'm no politician or economist so am not really in a position to offer alternatives to the current land tax situation in our fair state, but I'm sure there has to be a better way. The state govt cries poor and says that, with the removal of taxes such as this, our hospitals and education funds will suffer, but what about NT? They pay no land tax - are their hospitals falling apart? Even QLD has the threshold for trusts as well, and I don't see the Qld complaining about a lack of funds. I'm just so sick and tired of our state govt belting out the same old tired lines every time an unfair tax like this is questioned.

    There, end of rave. I feel better already- until I get the next land tax bill in the mail :mad:
     
  3. Redwing

    Redwing Well-Known Member

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    WA

    In WA the Rant and Rave is over Stamp Duty

     
  4. Jacque

    Jacque Team InvestEd

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    Vic and NT still come out no 1 and 2 for the highest stamp duty payable in Australia, with SA, WA and NSW next in line. Property taxes and duties are seen as such a cash cow aren't they?
     
  5. Glebe

    Glebe Well-Known Member

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    If I had my way States would be abolished.

    Hospitals, schools, police etc would be run by the Federal govt.

    Less duplication, greater scale, greater efficiency... less tax and more services.
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I don't think the states need to be abolished - there are many things which makes more sense to me to be locally administered.

    However, the important public services such as hospitals, schools, police and such should all be federalised in my opinion.

    There is a potential downside to such a move though - particularly with schooling ... while a federal school system would (hopefully) provide for consistency across the nation, it could actually produce a consistently bad school system - and you'd have fewer choices (you couldn't move interstate to find a better school system ... not that many people are likely to do so).