A 70-year-old widow pensioner has been hit with a $910.83 bill for land tax even though she lives in the townhouse concerned.
Mrs Betty Downes, of Hawker, is another in a series of people hit by the strict drafting and application of the land tax law.
Her daughter, Carole Duthie, of Bruce, says the case is unjust.
It arose as follows. Mrs Downes’, husband, William, died in 1978, leaving her a life estate in a house bought in his name. On her death the house was to go to the three children.
The house was exchanged for a smaller townhouse in Hawker in 1980. Mrs Downes had the life estate but the house is registered in the name of the Permanent Trustee Company Limited.
Under the Rates and Land Tax law, the townhouse is not the principal residence of the trustee company, so it gets hit for land tax. The trustee company, under Mr Downes’ will, is entitled to pass that bill on to Mrs Downes, which it has done.
The trustee company sought an exemption with ACT Revenue, but was knocked back.
Mrs Downes’ situation is not unusual. it is common practice for life estates to be left to widows and for the house to be held in the name of a trustee company while they live in the house.
Another case c ame to light yesterday. A Canberra man said land tax had been levied on a house owned by his deceased father, even though it had been vacant for more than a year.
Mrs Duthie said yesterday no income or rent came from the Hawker townhouse.
“”The trustee company does not act as a landlord, but performs a purely administrative function,” she said. “”The net effect of these circumstances is that my mother is being financially penalised for no other reason than the death of her husband. It is discriminatory, inequitable and contrary to the spirit and intent of the legislation.”
A spokesman for the Chief Minister, Rosemary Follett, said last night, (thursjul30) “”We understand and are sympathetic to the problem. The Chief Minister will be receiving a submission on the unintended consequences of the land-tax law on Monday. The problem is finding a way to overcome the anomalies without creating loopholes.”
The Leader of the Opposition, Trevor Kaine, criticised Ms Follett yesterday for not cutting the 20 per cent penalty for late payment of land tax and rates while cutting the discount for full rates payment to 4 per cent.
Earlier this week Mr Kaine called for quarterly payment of land tax. However, when the land tax was first introduced in 1989 he did not object to the one-hit payment of land tax.
The president of the ACT Landlord’s Association, Peter Jansen, said yesterday that very few taxes in Australia were payable a year in advance in one hit. Nearly all had some form of pay-as-you go.
It seems the difficult with the law is that it is drafted in a catch-all way. The onus is on the owner to prove that the property was not the principal place of residences as at July 1. Thus a law intended to tax investment properties has caught a lot of non-investment situations.
Another case arose over the exemption for people posted away for employment. It applies only to the owner. So a woman owner who had to go with her husband on a posting got hit for land tax.
Several other anomalies have arisen with trusts and company names. Many appeals to the ACT revenue have been rejected at the time of the levy for this year. And land tax is due at the same time as the first rates installment on August 15.