The ACT Government announced last night that it would introduce legislation for quarterly assessment of land tax and an appeal committee to prevent anomalies.Under present law land tax is payable on all residences not used as the principal residence of the owner, and assessed at July 1 for the whole year.
The law was designed to tax landlords receiving rent.
however, for two years the Landlords Association, the Canberra Rates Association, the Opposition and taxpayers have pointed to injustices. They arose in many cases where owners did not live in a house but were not landlords receiving rent: people allowing dependant relatives to live in houses, life tenants and people holding under wills, trusts or companies and other arrangements.
Also people who owned a house that was not their residence for even a short time in early July got hit for a whole year’s tax even though it later became their residence or they sold it.
Ms Follett announced that under the new legislation tax would be assessed on the first of July, October, January and April and be payable quarterly.
Ms Follett said, “”The Government recognised that the current method of establishing liability annually was inequitable in some instances.”
She said she was “”concerned that some residential properties had become liable for land tax even though family circumstances may warrant an exemption not currently provided by present legislation”.
Shortly before the announcement, the Canberra Rates Association concidentally complained in a statement that Canberrans who chose to live in a private retirement village could be liable for land tax. This is now likely to be corrected.
The Landlords Association has been lobbying for more than two years on the issue and last met Ms Follett two weeks ago. The first half dozen hardship cases were detailed in The Canberra Times in July and August, 1992, where people in several classes of cases were hit with land tax even though no-one was paying or receiving rent on the house.
Land tax is struck at 1 per cent of the unimproved value for the first $100,000; 1.25 per cent for the next $100,000 and 1.5 per cent thereafter.
Ms Follett also announced a land-tax amnesty. Land owners who might be liable to pay land tax but were not doing so could declare their liability and pay arrears by November 30 without incurring a penalty.
When land tax was introduced it was done on an opting-out basis. People who declared their property was owner-occupied were exempt; all others were assessed.
Ms Follett’s land tax announcement comes as the government is undertaking a review of the rating system. It will look at whether unimproved values are an equitable way of assessing rates and how large increases in particular areas could be avoided.