Presented by Robert Clark MP		www.robertclark.net

Whitehorse to be hit by new land tax increases

News Release - Friday, 17 December 2004

Official land tax adjustment figures published by the government last week show that small and medium size businesses and investors in Whitehorse will be hit by a new round of land tax increases in 2005, with more to come in 2006.

Example A. If a small business or investor owns property in Whitehorse worth $800,000 for land tax in 2004, they face a 45 per cent increase in their tax bill next year, from $2,805 to $4,075 and on average their bill will rise by a further 30 per cent in 2006.

Example B. If a medium size Whitehorse business owns property worth $1,200,000 for land tax in 2004, they are facing a 30 per cent increase in their tax bill next year, and on average their bill will have increased by almost 60 per cent by 2006. Their land tax bill will rise from $10,930 in 2004 to $14,245 in 2005 and an average of $17,360 in 2006.

The official indexation factors calculated by the Valuer-General specify the amount by which land valuations carried out in 2002 in each council area (which were used to calculate 2004 land tax) are to be increased in order to calculate 2005 land tax. They are set at one half of the total increase in average value between 2002 and 2004. This means that, on average, land values will increase by the same amount again for calculating 2006 land tax.

The Valuer-General has set an indexation factor of 1.13 for the City of Whitehorse, meaning that values for land tax purposes for 2005 will be increased by 13 per cent over values for 2004 land tax. Increases in tax bills for most taxpayers will be far higher than increases in land values, because as land values increase, land tax is charged at higher and higher rates.

It is a disgrace that John Brumby has been going around telling people he is giving them land tax cuts, and then turns around and slugs them with increases of thousands of dollars

Either Mr Brumby doesn't know what he is doing as Treasurer, or he doesn't care that these massive increases will send small businesses broke and cut people's retirement incomes by thousands of dollars.

The people John Brumby are driving out of business or forcing to sell their investments are people who have formed the backbone of our economy. Many have worked hard throughout their lives to build up their businesses or modest retirement investments, only to find their businesses are being driven to the wall or most of their retirement income is going to pay massive and unpredictable land tax increases.

It is no wonder private investment in Victoria is growing by less than half the national average, and that small business surveys show far less confidence in the Victorian economy than the national economy.

The government needs to go back to what used to be done in Victoria, namely periodically revising land tax scales to take genuine account of changes in land values, in order to restore some predictability to future land tax levels and encourage people to start investing in Victoria again.