www.robertclark.net - New property tax to hit Whitehorse

Hundreds of property owners in Whitehorse are under threat of new land tax bills of up to $6,320, on top of on top of the massive increases they are already paying.

The Bracks Government has announced that it is about to legislate in Spring to impose a new and higher level of land tax from next year on properties owned through trusts.

Many families and small businesses in Whitehorse own their properties through family trusts and other trust arrangements, meaning they will be liable for this new tax on all land holdings worth $20,000 or more.

The new tax will apply not only to commercial and residential rental properties, but also to family homes that are owned through a trust.

The new land tax on trusts will apply a one per cent tax rate to all land holdings worth between $20,000 and $1.19 million. This compares with land tax on other properties starting at a rate of 0.2 per cent on properties worth $200,000 or more. (See table below.)

Units and apartments that have previously not been liable to land tax due to the low land component of the property value will become liable to this new tax. For example, a unit or apartment with land value of $150,000 is not liable to ordinary land tax, but if it is owned through a trust, it will be hit with $1,500 in land tax from next year. . A family that has land worth $900,000 held through a family trust will be liable for land tax of $9,000, compared with $2,680 if owned by an individual or company - a $6,320 extra burden.

A property with land value of $400,000 held by a trust will be hit with $4,000 in land tax, compared with $600 for land owned by an individual or company - a new $3,400 impost.

This new tax will be strongly opposed by Whitehorse's Liberal Members of Parliament. It's about time that Whitehorse's Labor representatives - like Burwood MP Bob Stensholt and Mitcham MP Tony Robinson - also stood up for their constituents and opposed this latest slug, instead of just standing by and doing nothing as they have done with the huge increases in stamp duty and land tax burdens of recent years.

Bob Stensholt is the Parliamentary Secretary to the Treasurer. He should be in a position to speak up on behalf of local residents and tell Treasurer John Brumby that yet another new tax burden is just not on.

It's clear that John Brumby either doesn't know or doesn't care about the pain he is inflicting. The small business people and investors John Brumby will drive out of business or force to sell their investments are the backbone of the Whitehorse community. They create jobs and growth in the local area and provide homes for tenants many of whom would otherwise be forced onto public housing waiting lists.

Land Value	Ordinary Land Tax	Land Tax on Trusts	EXTRA Tax on Trusts
$100,000	$0	$1,000	$1,000
$200,000	$200	$2,000	$1,800
$300,000	$400	$3,000	$2,600
$400,000	$600	$4,000	$3,400
$500,000	$800	$5,000	$4,200
$600,000	$1,180	$6,000	$4,820
$700,000	$1,680	$7,000	$5,320
$800,000	$2,180	$8,000	$5,820
$900,000	$2,680	$9,000	$6,320
$1,000,000	$3,680	$10,000	$6,320
$1,100,000	$4,680	$11,000	$6,320
$1,200,000	$5,730	$12,050	$6,320

Source: "Proposed Trusts Model", SRO web site http://www.sro.vic.gov.au (go to page on "Special Trust Arrangements")