26–28 Brae Street, Bronte
An example of State Land Tax (SLT) agenda used to undermine exclusively rental housing
Numerous examples exist of a SLT agenda being used to undermine exclusively rental housing, let’s take just one.
- Freehold land
- Affordable exclusively rental housing
- 12 exclusively rental apartments.
Undermined by SLT agenda
- Sold March 2012
- Sale price = $6,158,000
- Gross rent (sale date contract) = $286,520
- V.G. Taxable Land Value (sale date) = $3,970,000
- SLT on land value = $63,520 per year
- Average weekly RENT per apartment = $459
- Average weekly SLT per apartment = $101 (22% of gross rent each apartment)
SLT imposed because the land is freehold and used in this example exclusively as rental housing. Small business is also ruthlessly targeted by SLT.
In this example SLT demands 22% of gross rent, and its intended agenda is to undermine the economic viability as “exclusively rental housing” promoting conversion to [12] strata apartments that immediately generates and compounds Stamp Duty. (This is the SLT agenda towards privately owned freehold land as only freehold land can be sub-divided into Strata lots.
[see below] How State Treasury collects on the initial Freehold sale and initial sale as 12 strata Lots. State Treasury pockets about $842,000 just on initial sales.
So why is SLT designed to undermine Freehold land, promoting numerous Strata lots?
Answer: SLT agenda is designed to generate and compound additional State property taxes by targeting Freehold land, as only Freehold land can be subdivided into Strata lots. This fact has corrupted, and is continuing to corrupt, planning in NSW.
Also, “SLT and State government [ Politicians] pension funding are interdependent” [This question has been asked, and, an answer avoided] Also a reason why State Politicians present and past never criticise State Land Tax Agenda.
Analysis
How does SLT agenda generate additional State taxation by undermining liable private freehold land?
- First, the sale of the freehold block occurs and, immediately generates state stamp duty of $545,247 individually
- Second, the freehold is converted to 12 strata apartments and sold for, say, $650,000 each
- Then:
- Stamp Duty on sale of each strata apartment is $24760 x 12 = $297,120
- Stamp Duty has generated – – – – – – – – – – Total. = $842,367.
Also GST is generated, but is not included in this example.
Strata Apartment re-sales are significantly more frequent, compounding future State property taxes. Also, GST is generated.
This is planning NSW style as SLT policy and State Treasury vested interest in promoting Strata subdivision of freehold land
has corrupted Planning in NSW.
SLT and the ‘Rental Crisis’
- SLT agenda has exacerbated the ‘rental housing crisis’ and demand for affordable and government subsidised housing
- The State Government/ Treasury and development lobby calls this “town planning”.
- Housing and small business tenants are often unaware they are targeted by SLT
- How many tenants, looking for local affordable apartments know the State Government targets SLT at rental housing?