Media release – Tasmanian Liberals, 15 April 2021
Delivering Land Tax Relief For Landowners And Shackies
A re-elected majority Gutwein Liberal Government will reduce land tax rates for Tasmanians and introduce a Foreign Investor Land Tax Surcharge on residential properties, as part of our plan to modernise land tax arrangements and Secure Tasmania’s Future.
The surcharge will ensure foreign investors are paying their fair share when owning residential properties in Tasmania and contributing more to the essential services and infrastructure our growing state needs.
We estimate the surcharge will raise around $1.5 million per year, allowing us to reinvest the benefits straight back into the community and ease cost of living pressures for Tasmanians by offsetting significant land tax bill increases.
Importantly, the surcharge will not apply to those using land for example, for primary production or commercial properties, or land associated with a principal place of residence.
Similar to other states, the surcharge will be set at 2 per cent, complementing the Foreign Investor Duty Surcharge to level the playing field on property transactions that we introduced three years ago.
Additionally, within 60 days of being re-elected we will task Treasury to consider and provide advice on capping significant land tax increases, as seen in other jurisdictions in the past.
With our economy strong, we expect the next round of land valuations will include significant uplift in property valuations as a result of the very strong growth in our property market. We want to put more money back into the pockets of hard-working Tasmanians, and this will look at the best way forward to alleviate these impacts and reduce cost of living pressures.
And as I announced in the State of the State, we will increase land tax thresholds to reflect today’s strong property market, with the land value at which land tax becomes payable to double from $25,000 to $50,000. The top threshold will also increase by $50,000, from $350,000 to $400,000.
These new thresholds will better reflect today’s strong property market, with around 70,000 landowners, including shack owners, to benefit by up to $613 a year, and 4,100 additional landowners to pay no land tax at all in the year ahead.
The premium penalty rate of interest will be halved from 8 per cent to 4 per cent, and land tax bills over $500 will be able to be paid in three instalments over the year.
This strong plan will level the playing field, ensuring foreign investors are paying their fair share and allowing us to invest more into the essential services that Tasmanians expect. It will also ease the need for increases in rental prices, with our strong expectation that landlords seek to pass on these savings to tenants next year.
Importantly, these changes will only be delivered by a majority Gutwein Liberal Government. Labor’s unaffordable promises cannot be believed or delivered, unless they cut programs, sack staff or tax Tasmanians more.
Rebecca White MP, Labor Leader & David O’Byrne MP, Shadow Treasurer, 15 April 2021
Labor will cut land tax
Labor Leader Rebecca White said Labor’s plan to reduce land tax would place downward pressure on rent while helping out landlords and shack owners.
“A majority Labor Government will deliver big land tax cuts for all land taxpayers with holdings of up to $3 million,” Ms White said.
“These cuts will have a focus on shack owners, ‘mum and dad’ investors and landlords in the lower and middle tiers of the rental market.
“The cuts will ease the cost of living pressures on small land owners and provide incentives for medium scale property investors to cap or reduce rental increases.
“Under a Labor Government, foreign land owners will be required to pay more tax, because Labor’s priority will always be looking after Tasmanians who need housing first. But agricultural land will be exempt from the foreign ownership surcharge.
“Our plan will help make the land tax system fairer and place downward pressure on rents.”
Shadow Treasurer David O’Byrne said Labor’s plan will:
- abolish land tax at $100,000 and below
- cut land tax by 60 per cent between $100,000 and $150,000
- cut land tax by 40 per cent between $150,000 and $350,000
- cut land tax by 35 per cent between $350,000 and $500,000
- and cut land tax by 20 per cent between $500,000 and $1 million
“Labor’s land tax cuts are up to four times greater than those announced by the Liberals and Peter Gutwein,” Mr O’Byrne said.
“This policy will result in 60,000 land tax accounts having their tax abolished and over 150,000 land tax accounts getting cuts ranging from between $450 and $2300 per year.
“Labor’s changes are fair, with the biggest percentage of cuts being at lower land values and effective land tax rate cuts greater for small landholders.
“Only Labor is working for Tasmanians to deliver better housing outcomes.”
