Changed land tax still has sting, says MP

By Bridget Brady
STATE Government chang-es to a controversial land tax are all smoke and mirrors, according to a Liberal MP.
Landowners who thought they were safe from paying up to $95,000 per hectare through the Growth Areas Infrastructure Charge (GAIC) will end up paying in other ways, Bass MP Ken Smith says.
“Unfortunately, some land-owners now believe that the GAIC is someone else’s problem. But it is not that simple. The government will require the GAIC liability to be registered on a land title, which means developers will likely be the only people able to afford to buy the property,” Mr Smith said.
Under a proposal ann-ounced early this year, the government planned to charge $95,000 per hectare on land brought into the Urban Growth Boundary (UGB) from 2009, to be collected from the vendor when the land was sold.
This would have affected sellers in parts of the City of Casey.
A charge of $80,000 per hectare against land brought into the UGB after 2005 would have affected land in the Officer area.
But the State Government last month announced changes to the GAIC, which would see buyers, rather than sellers, levied at those prices.
Mr Madden said he thought the government had “got the balance right” and that people who owned land in the UGB should feel “very optimistic” that the value of their properties would increase significantly.
The purpose of the GAIC was to fund infrastructure to new communities, Mr Madden said.
“We want to ensure that when the houses are being built, there is appropriate planning and resources to deliver the public transport, parks, schools, roads, hospitals and other vital infrastructure that new communities need to help preserve our renewed quality of life,” Mr Madden said.
But Mr Smith said people who needed or wanted to sell their properties would be exploited by buyers who were not prepared to pay the asking price for a property because the GAIC would be “hanging over their heads”.
Buyers could defer the payment, but it would gain interest.
“As the minister has determined that developers will now pay interest as well as CPI increases on the land until a certificate of compliance is issued, they will be more likely to wait until they are ready to develop before buying the property.”
This would leave landowners who wanted to sell in the next few years stuck, Taxed Out chairman Michael Hocking said.
“The incentive to purchase a property that is 10 or 15 years from development is just not there,” Mr Hocking said.
“Properties under two hectares do not have to pay the tax, but very few properties in the UGB fall into this category. Lifestyle properties do not generate income, but the GAIC will still apply. This is unfair,” Mr Smith said.
The GAIC legislation is expected to be presented to State Parliament for consideration later this year.