The Land Tax Forum questions the New South Wales State Government State Land Tax agenda and provides data to encourage debate about a tax which is designed to undermine the viability of ‘existing use of Freehold’ in New South Wales. State Land Tax (SLT) targets rental housing and small businesses that require freehold site.
Numerous examples exist in almost every council area of exclusively rental apartment blocks that require a Freehold site being targeted and undermined by State Land Tax agenda, an agenda that has exacerbated the shortage of affordable rental housing.
State Lands tax agenda impacts ‘high street’ small business and businesses using industrial land that require a Freehold site. This undermining is done by exploiting the “Mass Valuation Methodology” intended for Local Government as directed by the Valuation of Land Act 1916.
How does State land Tax exploit the Mass Valuation System?
First, the Mass Valuation System which imposes land values within each Council area requires all land within a Council area have its land taxing value set on the same date, and valued as vacant.
In other words, all land in each Council area is valued to reflect its redevelopment value — a situation that may not occur in 50 years in most Council areas.
This methodology of mass valuation of land was only ever intended to set the taxing value for Local Government and its intent was to be fair to Ratepayers.
Because each Council must apply its respective adjustable land tax — ‘rates’ — to all land in the same class.
Accordingly, the Mass Valuation methodology intent was fairness seeking to equitably distribute the funding of each councils among its ratepayers by land taxing land values set from the same base “Vacant”. Also, Councils must apply the same land tax “Rate” to all land in same class.
State Land Tax agenda does not seek fairness
Done by:
- Selectively targeting rental housing
- Imposing a State Land Tax ‘Rates” at usury levels compared with Council land tax ‘Rates’
- State land tax Rates is a flat non- adjustable tax rate that increase with increased land value.
The following comparative data show the extent State Land Tax, “Tax Rate” EXCEEDS, Council’s residential land tax “Rates”
Council Examples from 2012
- Waverley: 1150%
- Randwick: 930%
- Woollahra: 3470%
- Marrickville: 737%
- Leichhardt: 700%
- Penrith: 425%
- Sutherland: 585%
- Hornsby: 1070%
- Ku-ring-gai: 1630%
- Manly: 976%
- Pittwater: 1050%
- Baulkham Hills: 1040%
- Willoughby: 1240%
So,why is State Land Tax designed to undermine existing use of freehold land?
Freehold land is the only land that can be subdivided into strata lots. So converting freehold land converted to strata lots generates additional state property taxes and GST. It also compounds government revenue because strata lots change hands much more frequently than freehold lots, and generate revenue for governments every time they change hands for and compounds significant
SLT agenda is called ‘town planning’ by Sate Treasury —Banks–and the development lobby.
Look at what is occurring and planned along the Redfern to Mascot corridor where industrial freehold land is/and has been deliberately undermined by SLT to be redeveloped with rows of multi story strata housing, to a density, the Redfern to Mascot corridor has real potential to become Sydney’s “Social Horridor ”
(See the old Victoria Park Racecourse beside the M5 opposite the Super Centre to glean what is proposed in this horridor.)
SLT agenda has exacerbated the rental crisis, targeting tenants in privately funded rental housing and has exacerbated demand for government subsidised rental housing. This is then used by the development lobby (that includes State Treasury) to construct more multi -story housing.
There are strong indications SLT is directed to supplement Politician pensions, according their unique collective silence on SLT agenda.
SLT agenda subverts local planning, and housing standards. Yet, locale council’s have had little to say,even compromising locale planning standards approving over-development to sourse subsidised State housing.
There is no doubt the designer of SLT agenda is the New South Wales State Treasury Department,knowingly and deliberately exploiting a mass valuation process, a valuation process intended for locale government.a process that ignores existing use of freehold land imposing SLT at a rapacious tax rate to directed at freehold land us.
Please read letter to Barry O’Farrell July 2011 who has refused to respond to information requested.
Why A Land Tax Forum?
Since Labor Premier Joe Cahill re-introduced SLT in 1955 (after 50 years) using the rhetoric “Taxing the Martin Place squatters, the big fellow” all political Parties have allowed SLT to evolve into a tax on rental housing and small business piloted by State Treasury spin specialist in obfuscation by faceless Bureaucrats, fearful, the Media may one day investigate the HOW? and WHY/ SLT is designed to undermine private liable freehold land, to generate and compound additional property taxes, e.g. stamp duty and GST.
The Office of State Revenue, is the State Government equivalent to your local council rate department.
I was recently asked to address a meeting about SLT impact, and, stated
“State taxation policy to generate State revenue, by undermining freehold land use, to promote its subdivision into numerious strata lots, is Planning and State taxation in NSW gone mad, or corrupt”.
I was surprised at the applause.
Politicians, and density housing lobbyists, constantly advocate more, strata housing stacks and point to Sydney’s ‘Rental Housing Crises’ calling for Federal and State Governments to spend $billions on additional strata housing. Demand planning laws and housing standards be altered to meet vested interest . AS only Freehold land can bbecome strata lots, almost every freehold site has been given over [ EG Rosebery –Victoria Park –Harold Park, racecourses just to name a smidgen of the freehold gone to to strata density housing] Already, council are under pressure from the Sate government to rezone established residential areas with Freehold housing in its sights, for multi-story strata units,now, so over-supplied, Governments provided numerous incentives to help sell, what is already toxic stock in many areas …
Public Housing Lobby Groups, such as ACOSS (Australian Council of Social Services) National Shelter Community Housing Federation of Australia, Bridge and the like, all calling for $billions to be spent on ‘Public Housing’. All play and service worthy cause, all exempt from SLT, all silent about SLT impact on exclusively rental housing that is privately funded. Then,as SLT agenda has acerbated the rental crises and demand for affordable rental housing, SLT agenda could be seen as a positive to social housing groups..
Because of a deliberate government policy to undermines private freehold land use as rental housing, or small business.
We need forum
- to debate SLT policy and raise concern
- to provide information.
- for resident action groups to question and protect Sydney’s established residential suburbs becomming suburbs of strat stack housing.
- to discuss the constant erosion of participatory planning, to save residential standards and amenity.
- to enshrine in law ‘the publics right to participate in planning decisions’
- to recover residents right to inspect council’s valuation rolls.
Land Tax Data
Since 2000 we have collected data in all Council areas in NSW showing the
- total sum of State Land Tax (SLT) collected in each Council area.
- number of properties liable in each area.
- SLT imposed and collected on rental housing in each area.
- SLT imposed and collected on liable non-residential in each area. [Commercial–Industrial etc],
This data will be posted from time to time here this web site.
Land Tax Comparative Surveys
An annual survey compares SLT with Local Government Land Tax we all call “Council Rates” in each council area within the Sydney statistical division, and coastal council’s from Bega Valley to The Tweed.
Both SLT and Council Rates tax land values set by the Valuer General applying the mass valuation process methodology. Our comparativeis provided an easy to read graphical comparative data received by us in writing. a comparison that compares apples with apples.
Only a very small number of councils have resisted providing data in writing, data that is ‘Public Information’.
It is a concern that the Carr Government refused to answer any questions about SLT. It also removed public access to local councils’ valuation rolls that seriously eroded the integrity of the Valuer General mass valuation process, removing the long standing fundamental element the process be, open and fair to all Rate payers.
(See further comment under Land tax data)
Correspondence
During the past 10 years numerous letters and emails have been sent to state politicians, councils, councillors and media.
Generally, state politicians and parties are not interested in discussing how SLT has undermined rental blocks of rental housing and undermines small business.
The correspondence exposes Politicians as sensitive evasive (silent) when told HOW, and WHY SLT is deliberately designed to impact Freehold Property.
We have a fresh Premier. Please read our letter to Barry O’Farrell.