A majority Liberal government will:
- Deliver a reduction in land tax of up to $613 per annum to nearly 70,000 land tax payers, including thousands of shack owners. This will also mean an extra 4,100 Tasmanians will not pay land tax in the year ahead.
- Introduce a Foreign Investor Land Tax Surcharge on residential properties with the exception of principal residences, with the funds to be used to offset significant land tax bill increases for Tasmanians.
- Allow land tax bills to be paid by instalments and reduce penalty interest.
- Put downward pressure on rents, to assist in our tight rental market.
In recent years, our strong and growing economy, as well as confidence in our property market, has meant increased property values.
Despite COVID, this trend has continued, resulting in growing land values and further increases in land tax.
While land tax in Tasmania as a share of total revenue is low compared to other states, there remains a need to modernise our land tax thresholds.
We announced in March that we will would reset the land tax thresholds to reflect today’s strong property market and a re-elected Majority Liberal Government will:
- Double the land value at which land tax becomes payable, from $25,000 to $50,000; and
- Increase the maximum land value threshold by $50,000, from $350,000 to $400,000.
These changes will save around 70,000 Tasmanians, including shack owners, up to $613 on their land tax bill.
It will also mean an additional 4,100 landowners will not pay land tax in the year ahead, bringing this to a total of nearly 7000 taxpayers that will pay no land tax.
These measures are expected to cost around $56.4 million over four years and will place downward pressure on the need for rental increases to be passed on to tenants in today’s tight rental market.
Introduce a Foreign Investor Land Tax Surcharge
A re-elected Majority Liberal Government will introduce a Foreign Investor Land Tax Surcharge on residential properties.
Importantly, the surcharge will not apply to those using land for example, for primary production or commercial properties, or land associated with a principal place of residence.
While the Liberals welcome foreign investment into Tasmania and recognise its importance to our economy, particularly in our regions, it is essential that foreign investors pay their fair share and contribute to the essential services and infrastructure our growing State needs.
The Foreign Investor Land Tax Surcharge will be set at 2 per cent and will bring our land tax arrangements into line with those States that have implemented similar surcharges.
It will also be designed to complement the Foreign Investor Duty Surcharge, to level the playing field on property transactions that the Liberal Government introduced two years ago.
The revenue from the introduction of the surcharge is estimated to be around $1.5 million per year and will be used to offset increases in land tax bills for Tasmanians.
Due to the expectation that the next round of land valuations will include significant uplift in property valuations as a result of the strength of our economy, we will task Treasury to provide options on a potential capping regime as introduced in other jurisdictions.
We will seek advice on such measures within 60 days of being returned to Government.
Reducing penalty interest and allowing payment by instalment
The impacts of COVID, along with rising property values, have created challenges for taxpayers.
To assist taxpayers with their land tax liabilities, we will halve the premium rate of interest charged on unpaid tax, from 8 per cent to 4 per cent because it doesn’t seem right to penalise Tasmanians as our economy recovers from the impacts of COVID.
And we will also allow land tax bills over $500 to be paid in three instalments annually, helping to spread out the cost throughout the year.
These additional supports will complement existing measures including the ability to enter into a payment plan with the Commissioner of State Revenue, and are expected to cost around $500,000.
The Tasmanian Liberal Government is currently waiving land tax for commercial land that has been impacted by COVID-19 pandemic.
Further, to incentivise the availability of long-term rentals, we continue to provide a three-year land tax exemption for newly built housing, and a one year exemption for former short-stay accommodation that become long-term rentals.
We recognise that the private rental market remains challenging for many, and during COVID-19 we provided significant support to tenants and landlords.
This has included $3.7 million to support tenants and landlords with rent support, helping to keep people in homes and helping to insulate landlords from financial liability.
In our last term of Government, we reformed payroll tax arrangements and made it amongst the most competitive in the country, particularly for smaller businesses.
We continue to offer a range of tax rebates, as well as over 90 concessions for Tasmanians, as well as employers including –
- $22 million Payroll Tax Rebate Scheme and Small Business Grants to hire apprentices, trainees and youth employees.
- $45 million in energy concessions each year.
We will also legislate to increase the threshold for our 50 per cent stamp duty concession for first home buyers and pensioners downsizing for property sales of $400,000 to $500,000.
- The Labor-Green Government removed the land tax concession for shack-owners.
- In 2018, Labor wanted to introduce a vacant property tax (shack tax).
- Labor’s David O’Byrne criticises land tax, but has failed to commit to any relief.
The changes to land tax thresholds are expected to cost around $56.4 million over four years.
The introduction of a Foreign Investor Land Tax Surcharge on residential land, excluding primary production and principal place of residence land is anticipated to raise around $1.5 million per annum ($6 million over four years) which will be used to further offset significant land tax bill increases for Tasmanians.
The changes to payments by instalment, and reduction in penalty rate interest are expected to cost around $500,000 per annum or $2 million over four years.
Total cost of policy:
$58.4 million over four years (2021-22 to 2024-25).