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Land Tax Increases To Hit WellingtonWellington’s small and medium size businesses and investors will be among those hardest hit by a new round of land tax increases in 2005, with more to come in 2006. By Philip Davis - 15th December 2004 - Back to News Liberal Member for Gippsland Province Philip Davis said official land tax adjustment figures published by the government last week were cause for serious concern among Wellington residents.
Example A. A small business or investor with property in Wellington worth $200,000 for land tax in 2004 is facing a 106 per cent increase in their tax bill next year, and on average their bill will rise by a further 51 per cent in 2006.
Example B. A medium sized Wellington business with property worth $500,000 for land tax in 2004 is facing a 185 per cent increase in their tax bill next year, and on average their bill will increase a further 150 per cent in 2006.
The official indexation factors calculated by the Valuer-General specify the amount by which land valuations carried out in 2002 in each council area (which were used to calculate 2004 land tax) are to be increased in order to calculate 2005 land tax. They are set at one half of the total increase in average value between 2002 and 2004.
"This means that, on average, land values will increase by the same amount again for calculating 2006 land tax," Mr Davis said.
"The Valuer-General has set an indexation factor of 1.53 for the Wellington, meaning that values for land tax purposes for 2005 will be increased by 53 per cent over values for 2004 land tax.
"Either John Brumby doesn’t know what he’s doing as Treasurer, or he doesn’t care that these massive increases will send small businesses broke and cut people’s retirement incomes by thousands of dollars."
Mr Davis said the people John Brumby was driving out of business or forcing them to sell their investments were the backbone of Wellington’s economy.
"People who have worked hard throughout their lives to build up small businesses or modest retirement now face their businesses being driven to the wall or the majority of their retirement income eroded by the massive and unpredictable land tax increases," he said.
"The Bracks Government needs to go back to what used to be done in Victoria – that is periodically revising land tax scales to take into genuine account the changes in land values.
"This will restore some predictability to future land tax levels and encourage people to start investing in Victoria again."
Source: http://gippsland.com/ Published by: news@gippsland.com
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