Home-owners have been hit hard by the Budget – more than $450 a year on average.
Rates go up by more than usual and three new charges have been imposed on property owners.
Overall, the ACT 145,000 residential property owners can expect to pay an extra amount to the ACT Government next financial year equivalent to 40 per cent of their 2005-2006 basic rates bill.
And the charges are not a one-off but will continue into future years.
Treasurer and Chief Minister Jon Stanhope said in his Budget speech that rates would go up by 6 per cent.
However, the Budget tables show rates revenue will rise 11 per cent from $141 million to $157 million. Some of that is made up of new dwellings. But most of it (9.8 percentage points) will be seen in rates notices. It will be an increase of $96 on the average $980 rates bill.
The fixed charge goes up $48 from $392 this financial year to $440 next year, a rise of 12.4 per cent. The unfixed charge will go up (on average) by a further $48. It now means half of rates revenue will come from the fixed charge.
The basis of the increase has been changed from the usual consumer price index – hitherto the gold standard of what was a politically acceptable maximum rate rise – to the wage price index. It means a greater increase because wages rise faster than inflation.
The new charges are an emergency services levy; extra water costs; and a utilities levy which will inevitably be passed on to home-owners.
The emergency services levy of $84 per household will raise about $10 million. A similar levy on commercial premises will raise a further $10 million.
The 30 cents extra per kilolitre for water will raise about $14 million – about $118 per household.
The utilities levy will be raised from electricity, water and telecommunications companies for using ACT land to deliver services. It will raise $15 million and inevitably be passed on to property owners – about $100. This $100 is not included in what Mr Stanhope acknowledged was a Budget cost to the average home-owner of a dollar a day – or $365.
Renters will not be immune from the increases because landlords will inevitably pass on the costs in this tight rental market.
There is no change in conveyancing stamp duty rates, and revenue is expected to fall from a record $163 million in 2005-06 to $158 million in 2006-07 due to flattening prices in the housing market and fewer transactions more than offsetting any increase in new dwellings being conveyed.
Stamp duty concessions for low-value properties for first-home buyers have been cut slightly as thresholds have risen.
There have been no changes in land tax or insurance levies. Both of these are bringing in healthy increases in revenue because of the units and commercial construction boom and large increases in the value of insurance as people increase their insurance levels after the bushfires.
Victoria, Queensland and NSW have announced cuts in land tax in 2006-2007.
The ACT land tax rate is 10 times higher than Victoria’s for all properties except those at the highest end. The ACT rate is generally higher than NSW’s unless the NSW property owner owns property with an unimproved value of more than about $2 million. But the ACT does not charge a duty on mortgages as NSW does.
Administrative charges are to be increased across the board. Increases can be expected in planning fees.
A new fee will apply for false-alarm callout to the fire service. Third and subsequent false call-outs will incur a fee of $200 for residential and $500 for commercial properties.