Tax Bill amendments to help regional and rural councils

THE Coalition are proposing a number of amendments to the State Taxation Acts Amendment Bill 2017 in the Legislative Council today.

The effect of the amendments is to propose:

·  Removal of the increase to stamp duty on new motor vehicles;

·  Removal of the new “vacant residential land tax”;

·  Removal of the restriction on partners/spouses transferring property between each other without stamp duty being payable;

·  Removal of the abolition of off the plan stamp duty concessions for all except owner-occupiers; and

·  Removal of the proposed centralisation of all property valuation functions in the Valuer-General (at the expense of councils) and removal of the provision to require annual valuation of property for land tax purposes.

The rationale for the amendments (in the broad) is that the provisions we seek to delete are a clear violation of the Labor government’s commitment – made by Daniel Andrews on Channel 7 the evening before the election – that he would not increase taxes nor introduce any new tax.

The Coalition does not support Daniel Andrews breaking a clear promise to all Victorians, particularly when to do so will cause financial distress to many.

In relation to …

Centralising valuation with the Valuer-General and moving to annual re-valuation of properties for land tax purposes

· This will cause major disruption to local councils which currently have in-house valuation capacity or contracts with third party valuers. This proposed change has been roundly condemned by local governments and valuers throughout Victoria.

· Councils do not have a conflict of interest when it comes to property valuations, as a higher valuation does not increase council rate revenue – it simply determines how the rate revenue is split across ratepayers. By contrast, the State Government has a direct financial interest in increasing property values for land tax purposes. This is a perceived conflict which does not assist the Valuer-General or the government.

· Annual land tax revaluations will be less accurate than the current biennial system. Under the current system, there are 2 years’ worth of transactions and data points with which to determine valuation movements. By moving to annual revaluations, the data points will be halved and there will be a lower level of confidence in valuations as a result.

· There are doubts about the administrative capacity of the V-G’s office to cope with the expected increase in challenges to valuations as a result of the proposed change.

· Under the current system, land tax payers receive an increase every two years (assuming a rising market) then a ‘breather’ year when the land tax will be the same as the previous year. Labor is proposing a system which will see land tax payers pay more land tax each and every year.

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