An anomaly in the land-tax legislation will result in people being hit for a whole year’s land tax even if they hold a rental property for a few days in the new financial year.
The president of the Landlords’ Association, Peter Jansen, said yesterday that he knew of a case of a woman who had sold her property, but as settlement was scheduled for July 3, she would be hit for the whole year’s tax of $1000.
The legislation assessed tax for the whole year on the basis of ownership on July 1. Mr Jansen called for quarterly assessment.
The Government announced on Tuesday a new higher scale of land tax for unimproved properties valued at more than $100,000.
It agreed last year to allow payment of the tax in four quarterly instalments, after Mr Jansen’s association made representations. But it refused to make quarterly assessments, thus landlords who sold or moved back into their houses part-way through the year are still liable for the whole year’s tax.
“”It is iniquitous and unnecessary,” Mr Jansen said. “”If the Government is sending out quarterly-payment notices anyway, why can’t it do a quarterly reassessment if people’s circumstances change.
“”There would be no loss to revenue because what they lost on the swings they would pick up on the roundabouts. Some people might drop off the assessment through the year, but others would come on.”
A quarterly adjustment would be far more than just making some people pay up to a full year and letting others get a tax-free windfall of up to a year because assessments were made on just one day of the year.