Land levy planned despite anti-‘forever tax’ pledge
Property owners in Australia’s most populous state could pay up to $600 a year in taxes under a proposal to change the way emergency services are funded.
NSW is the only mainland state to fund emergency services by taxing property insurance customers; This tax has been blamed for causing premiums to inflate and make insurance coverage out of reach for many people.
But a NSW Treasury document has set out a set of proposals for a broad land tax to replace the controversial measure.
The government said the change would mean a fairer, more sustainable and more transparent system that would make insurance more affordable.
“We have an outdated system that penalizes working families,” NSW Finance Minister Daniel Mookhey told reporters on Sunday.
“People with mortgages have no choice but to pay, people with cars have no choice but to pay, but some of our largest corporate landowners can buy their way into contributing anything (to emergency services) by self-insuring.
“We need to confront cost-of-living pressures wherever we encounter them.”
Mr Mookhey acknowledged that cross-party support would be needed for any changes to progress and that the state opposition had not yet given the go-ahead, although the coalition had previously tried and failed to overhaul the tax while in government.
The government has not yet announced details of any planned revisions to the tax.
At the 2023 state election, Labor has committed to scrapping the annual land tax, which was introduced by the previous Liberal-led government to replace stamp duty for first home buyers.
Labor described the measure as a “forever tax” on homes and abolished it after taking office.
But the Treasury document includes five different proposals for progressive land taxes based on the value of residential, commercial, industrial, public and farm properties.
Each option requires a minimum contribution from all property owners, but the document recognizes that those with lower land values will generally have less capacity.
Property owners in the lowest housing group with land values up to $302,100 could pay an annual tax of $158 to $189, while property owners in the highest housing group with land values over $1.41 million would face an annual tax of $509 to $573.
“Leaving aside the (Premier) Minns and Mookhey’s vow not to tax the family home in perpetuity, we have always been concerned that those who currently pay for insurance would be worse off under any new system,” NSW shadow treasurer Scott Farlow said in a statement. he said.
The former Berejiklian government sought to replace the tax with a fee based on land values in 2017.
But it was forced into an embarrassing backflip due to concerns it could leave some taxpayers out of pocket.
