ACT landlords are being advised to hold off paying their land tax, after the Leader of the Opposition, Trevor Kaine, called yesterday for quarterly payments of the tax.
Mr Kaine said some people would have to appeal to welfare agencies for food assistance until they recovered from the August one-hit payment of the tax. Most payments are as higher than $1000.
Mr Kaine said many people, mainly older people, had complained about hardship of paying the tax in one hit by August 15 on pain of a 20 per cent penalty. And it came when the first rates instalment was due.
“”The Government allows rates to be paid in instalments,” he said “”Why can’t the land tax not be payable in the same manner?”
The president of the Landlords Association of the ACT, Peter Jansen, said he hoped the law would be changed to allow quarterly payments. He advised landlords to hold off paying till just before the due date of August 15, or just to pay a quarter of the amount now and wait to see if the law was changed before August 15.
He warned, however, that if the law is not changed, the whole amount fell due on August 15, and his understanding was that if payment was late, the 20 per cent penalty dated from July 1.
Mr Kaine did not go far as saying he would introduce an amendment to the Rates and Land Tax Act. The Assembly does not sit until August 11, and the position of the three independents is unknown.
It is understood that, on the Government’s view of the money-bill rule, the Opposition could introduce an amendment.
A spokesman for the Chief Minister, Rosemary Follett, said last night that quarterly payments were not on the cards. Land tax was a tax, not a payment for services through the year like rates.
Property owners have complained to The Canberra Times, the landlords’ association an to politicians about anomalies in the Act and have complained about its administration.
Complainants have included a woman whose husband was posted overseas so she went with him and rented out the house only to be hit with the tax. People who were away for less than a full year and people who had put their house in a company or trust name years ago for family reasons.
Mr Kaine cited the example of a widow living in the family home that had been willed to the children. The children were then liable for the tax.
The Commissioner for ACT Revenue, Gordon Faichney, says that a generous exemption policy would result in higher tax for the rest of the community.
People could appeal to his office for exemption, he said, as they had done last year. Of 338 appeals up to January 1, 283 had been finalised. 208 had been confirmed and 75 reduced or exempted.
Last year was the first year of the tax. Many people are being notified now of their unsuccessful appeal against last year’s assessment, at the same time as receiving this year’s notice.
Mr Faichney said people could appeal further to the Administrative Appeals Tribunal, but cost $240 to lodge an appeal.
Mr Jansen said the ACT should have the same system as NSW, which had a threshold of $170,000 total unimproved value of all a person’s rented land, before land tax applied.
Ms Follett’s spokesman said it was fair and equitable to apply to all residential property being rented out.
“”We believe the Act is being applied fairly and equitably,” he said. “”The Chief Minister is always willing to review the operation of the law if cases come to light of unintended consequences.”
It was possible for a new law to have unforeseen consequences. One had to be careful in framing a tax law and in responding to cries of hardship that the door was not left open to tax evasion.