Property News

New Land Tax System to Commence in NSW

16 January 2007

As of today, a new state-based tax valuation system has been put in place that is set to reduce tax bills fitted out to property owners.

Under the NSW Government initiative, land tax assessments will be based on a rolling three-year averaging of land valuations expelling the old system that many property owners claimed created wild fluctuations in valuations across the board.

The Treasurer, Michael Costa, said the new system provided a good result for more than half of the State's taxpayers who would pay less under the new assessments than under the previous system.

The average reduction for taxpayers is expected to be $1444 - a drop of about 11 per cent on last year's assessments.

In an interview with the Herald, My Costa said: "The introduction of three-year averaging provides greater fairness and certainty for land taxpayers by removing sharp swings in annual land valuations.

"It means land tax bills will change more slowly, giving more predictability to property investors. The land tax threshold - now $352,000 - is now averaged, preventing land tax 'bracket creep'," he said.

But while the new system will benefit some, it is expected others will still be slugged with higher tax bills.

Investment property owners will pay on average $1500 less, overall land tax will decrease by 1.6 per cent.

Some though will be faced with a double whammy of falling land values and a higher than expected tax bill because it's averaged over 3 years

Ken Morrison welcomed the new system but wants the NSW Government to look at ways to bring land tax rates down.

"The land tax averaging system is a very positive measure which will smooth out the yearly swing in tax bills, but taxpayers are still asking why their land tax rate went up by 21 per cent in last year's budget," My Morrison said

"What is needed is a program of staged land tax cuts to benefit both business and individual investors.

"The NSW Government has more than trebled its revenue from land tax since coming to office a decade ago. We need a rate reduction to compensate for our high land values," he said.

Click here to find out the latest land values for your neck-of-the-woods.

Source: Property Council of Australia