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Brumby’S New $6,000 Property Tax

Thousands of property owners across Gippsland will be hit with new land tax bills of up to $6,320 on top of the massive increases they are already paying.

By Philip Davis - 1st July 2005 - Back to News

Liberal Member for Gippsland Province Philip Davis said today almost everyone in Victoria who owns a business or residential property through a trust would be taxed from next year at a new land tax rate up to five times higher than the tax rate on other property.

"Family-owned businesses and family trusts that have invested in property will bear the brunt of John Brumby’s latest attack on property ownership in Victoria," Mr Davis said.

"The new land tax on trusts will apply a one per cent tax rate to all land holdings worth between $20,000 and $1.19 million, compared with tax on other land holdings starting at a rate of 0.2 per cent on properties worth $200,000 or more.

"A family that has land worth $900,000 held through a family trust will be liable for land tax of $9,000, compared with $2,680 if owned by an individual or company – a $6,320 extra burden.

"A property with land value of $400,000 held by a trust will be hit with $4,000 in land tax, compared with $600 for land owned by an individual or company – a $3,400 new impost."

Mr Davis said changes to land tax on trusts were foreshadowed in the State Budget, but no details were given.

"Now the new tax scale has been quietly published on the State Revenue Office website," he said.

"There has been no government announcement, even though Cabinet has already approved the new scale and legislation will go before Parliament in spring.

"This almost unbelievable new tax slug comes on top of the huge increases in land tax that have already hit Victorian property owners."

A typical family trust that will be hit with $9,000 in land tax next year has already seen their land tax bill rise from $1,400 in 2004 to $2,100 in 2005.

"This latest slug will destroy the last vestiges of confidence of many investors and small business people about owning land in Victoria," Mr Davis said.

"Investors and small business people whose families have bought investment properties or business premises through family trusts will now have their family and business arrangements thrown into turmoil.

"They will have to pay additional land tax or completely re-arrange their personal, family and business plans – incurring substantial legal and accounting fees in the process.

John Brumby either doesn’t know or doesn’t care about the pain he is inflicting. The small business people and investors John Brumby is driving out of business or forcing to sell their investments are the backbone of the Victorian economy.

"They create jobs and growth in their communities and provide homes for tenants, many of whom would otherwise be on public housing waiting lists."

LABOR’S NEW TAX SLUG ON TRUSTS

Land Value

Ordinary

Land tax

Extra tax

('000)

land tax

on trusts

on trusts

$100

$0

$1,000

$1,000

$200

$200

$2,000

$1,800

$300

$400

$3,000

$2,600

$400

$600

$4,000

$3,400

$500

$800

$5,000

$4,200

$600

$1,180

$6,000

$4,820

$700

$1,680

$7,000

$5,320

$800

$2,180

$8,000

$5,820

$900

$2,680

$9,000

$6,320

$1,000

$3,680

$10,000

$6,320

$1,100

$4,680

$11,000

$6,320

$1,200

$5,730

$12,050

$6,320

Source: "Proposed Trusts Model", SRO web site http://www.sro.vic.gov.au (go to page on "Special Trust Arrangements")


Source: http://gippsland.com/

Published by: support@gippsland.com



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