The Opposition with the support of independents is set to force changes to land tax in the ACT.
The Leader of the Opposition, Trevor Kaine, said yesterday (thuraug6) that he would move amendments when the Assembly sits on Tuesday to allow the tax to be paid quarterly. He would also move amendments to overcome some of the anomalies that have arisen in the past month.
Mr Kaine says it is unreasonable to expect people to pax the tax in a lump sum in advance at the same time the first rates instalment is due.
The anomalies include tax being levied on widows with life estates living in a house technically owned by the children or a trustee company under a will, on people with houses in a company or trust name, or on people whose spouse has been transferred for employment reasons.
At present land tax is levied on all land which is not occupied by the owner as principal residence. Many people have complained that the law has been applied too strictly and beyond its original intention of hitting only people with investment houses.
Other examples were houses vacant on July 1 being hit for tax. Sometimes these houses were in the process of being sold, transferred under a will or even having asbestos removed.
Mr Kaine said that he had sent out drafting instructions but if they were not ready in time he would seek a moratorium on the tax for a month.
The tax is due on August 15. After that date a 20 per cent penalty applies.
Mr Kaine’s proposed changes are supported by Independent Dennis Stevenson. Mr Stevenson said he had opposed the tax in the first place.
Independent Helen Szuty said last night that she agreed with quarterly payments, but would need to see the details of other changes before committing herself. The other Independent Michael Moore is out of town, but is expected to have some sympathy for the changes.
A spokesman for the Chief Minister, Rosemary Follett, said that the Government was expected to issue a statement today. (friaug7)
The Government has expressed concern that in fixing anomalies it might create loopholes. It is yet to take a formal position on quarterly payments. However, when the tax law was introduced Labor and the Liberals accepted the one-hit payment, and it is understood that the Government would need considerable persuading to reverse its previous position.
Mr Kaine said yesterday that it might be a good idea to restrict the tax to cases where there was a landlord-tenant relationship. This would avoid the situation where the tax is levied if children occupy the house, or if a widow with a life estate occupies the house, or if it is in the name of a company.
Ultimately, he would like to see land tax on residential property dropped, and has promised a Liberal Government would do that. He said the tax was inequitable because it was passed on to tenants. Further, as rents rose, so did rents paid to the ACT Housing Trust, which based its rents on market rents.
In the meantime, he would like the Commissioner for ACT Revenue to have greater discretion to deal with unusual or unintended cases. He had sent details of hardship cases to Ms Follett, as Treasurer, in the hope she might exercise her discretion to give relief.
Mr Stevenson, who opposed the tax in 1989, said more time should be allowed to look at all proposed laws so these unintended consequences could be avoided.
At least one idea that has been floated in legal and real-estate circles _ a stamp-duty amnesty for people with houses in company and trust names to get them into personal names _ has hit a snag. Those people would be hit with Federal capital-gains tax.
The president of the ACT Landlords Association, Peter Jansen, said yesterday that ACT Revenue was misinforming people. Its advisory pamphlet did not truly reflect the law and its was unfairly assessing people for the tax who were not legally obliged to pay it. It had applied too strictly the rule that the house had to be occupied on July 1 before an exemption could be obtained.