4 October 2016

A pox on both their houses as rates bite

4 October 2016 | Hank Spier

Rates are too high in the ACT. But at last the government is calling this tax what it is: Land Value Tax.

Governments of all persuasions have turned thief. They extort rates to pay not only for municipal services but anything else that takes their fancy and I use that word deliberately. The word as defined by the Oxford dictionary ”to get money from persons with force, threats or importunity”. The ACT Government’s threat is a hefty fine if you don’t pay up.

Over the past three years all ratepayers have seen huge increases in the region of thirty percent with no relief in sight. Chief Minister Andrew Barr lamented that he could only increase rates 7% this year because it is an election year. This begs the question, how much would he have increased them if it wasn’t? One can only speculate that it would have been his usual 10%.

Canberra’s ludicrously high rates are much higher than Sydney. Rates paid in Campbell on a small block are higher than rates on Sydney Harbour.

Rates have gone from 18% of revenue to 27% of revenue in the past five years. This is approaching a third of all revenue raised in Canberra and is the highest source of revenue collected from Canberrans. And not everyone pays rates. This means the crippling burden falls on the same select group of people year after year.

Governments are addicted to rates and their greed knows no bounds. Unlimited rate increases cause hardship and lack of certainty particularly to the elderly on fixed incomes. These extortionate rates are forcing some Canberrans out of their homes or going without heating in winter.

This rot must stop. Rates must be frozen for the next 2 years. After that they must be capped in line with CPI as they are in NSW. The capping of rates must be enshrined in law so as to prevent governments reverting to their greedy old ways. Governments must be accountable. This free for all must stop and ratepayers given a break from legalised theft.

Ratepayers are sitting ducks. Not only do we pay more than our fair share of running the Territory, we are easy targets for new taxes or levies that are attached to our rates bills. We now have 2, the emergency services levy and the newest levy the levy for domestic violence. These are both important things but why just ratepayers paying, why not everyone in Canberra? It would be much fairer and easier to put these levies onto electricity bills.

Older ratepayers in inner Canberra have lost the most ground in recent years. They have suffered three major hits. First the value in their properties has risen, second the rate in the dollar has been increased and third people on the Old Age Pension’s rebate had been cut from 50% of the bill to a maximum of $780. If you take an average property in Campbell the rates are $4000, under the old scheme a pensioner would have been rebated $2000 now it’s $780.

When it comes to extortionate rate increases there is no difference between Liberal, Labor and Green governments, except to say that Labor is greedier and has got much better at it than Liberal. Furthermore, Andrew Barr boasts about how he has increased our rates.

Written and authorised by Lucinda Spier, Canberra Community Voters Party.

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bringontheevidence4:35 pm 10 Oct 16

Dondon said :

bringontheevidence said :

Yes she would have body corporate fees, but these would be no more than the maintenance costs of a 40+ year old detached house. She would also have significantly lower heating and cooling costs (EER 5.0) and her rates would be much lower.

Not sure about that complex, but the strata fees for an apartment not far from there are over $6000 p/a

Then there is the over $2000 p/a special levy because most apartments have been built by shonky builders and have water ingress problems

There is also the rates charges that need to be paid of over $1000 p/a

So she would save $2000 a year on rates, $1000 a year on heating and cooling alone (using EER figures), probably $1000 a year in water and other utilities and a few hundred per year in insurance. That leaves a gap of, at most, $2000 a year assuming she is still capable of doing all of her gardening (mowing etc) so doesn’t have garden costs.

Do you honestly think you can find a 40+ year old house that you can maintain with $2000 a year? I highly doubt it.

Dondon11:46 am 10 Oct 16

bringontheevidence said :

Yes she would have body corporate fees, but these would be no more than the maintenance costs of a 40+ year old detached house. She would also have significantly lower heating and cooling costs (EER 5.0) and her rates would be much lower.

Not sure about that complex, but the strata fees for an apartment not far from there are over $6000 p/a

Then there is the over $2000 p/a special levy because most apartments have been built by shonky builders and have water ingress problems

There is also the rates charges that need to be paid of over $1000 p/a

bringontheevidence9:29 am 10 Oct 16

Acton said :

Jane knows her modest cottage in Griffith is worth over a million dollars, maybe even $1,250,000. The buyer’s agent suggested Amaya, which is in her suburb and looks very attractive. However, Jane is shocked to learn that a three bedroom apartment in Amaya is priced at $1,462,900 and a four bedroom apartment recently sold for $2,150,000. On top of that she will have to pay $74,462 in stamp duty, or perhaps a little less if she is eligible for a concession. Jane knows that any place with a lift is going to have high maintenance costs. What will the annual body corporate fees be she wonders?

So to move from her home to a smaller three bedroom apartment in the same suburb she will be out of pocket by at least $200,000, face high ongoing costs with no chance of a cruise, even to Fiji.

Strawman argument much?

A three bedroom apartment in Amaya is 160-180sqm of floorspace not including terrace, much larger than a cottage in Griffith and not a ‘downsize’ option. A 2 brm apartment would be around 100sqm (still big for an apartment), so much more suitable and can be purchased for $650,000.

And get this, if Jane is over 60 and owns her home she would only have to pay $20 in stamp duty on the purchase (that’s not a typo).

Yes she would have body corporate fees, but these would be no more than the maintenance costs of a 40+ year old detached house. She would also have significantly lower heating and cooling costs (EER 5.0) and her rates would be much lower.

Not to mention she would have an additional $500,000 in her super account, which equates to an additional income (depending on returns and drawdown rate) of $500-600 per week!

pink little birdie8:50 pm 09 Oct 16

Most people I know who have downsized have been thrilled and wished they had done it sooner. Often they are in houses and yards that are too big for them to maintain comfortably. It is a case for smaller properties also being available in the local area for people to downsize too.

These articles and comments have totally been about rates and maintaining peoples wealth. I have not seen a policy on affordability and accessibility from most of the candidates despite the evidence that this is an increasing issue across Australia (but generally falls under state and local government jurisdictions).

JC5:37 pm 09 Oct 16

dungfungus said :

Acton said :

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Jane Doe has lived all her married life in a modest home in an inner suburb, say Griffith. She bought the home with her husband and together they raised two kids.

Her cottage garden gives her great joy. A few years ago Jane’s husband died and she now lives off his modest government superannuation. She has a small circle of friends she has known for many years, all living close by who pop in regularly for a cup of tea. Jane and her elderly friends are shocked and worried about the way rates are increasing. The annual rates assessment is the largest single bill Jane receives all year. In five years her rates have risen by 73% from $1,598pa in 2011, to now $2,771pa. To pay these rates Jane has to cut down on luxuries. She no longer buys plants for her garden. She doesn’t go to the movies. She has cancelled her subscription to the Woman’s Weekly.

Recently a nice young real estate agent knocked on her door and asked if she would like to move somewhere cheaper. He knows rates are going up and tells her rates will keep on increasing by about 10% every year. He asks Jane if she thinks she will still be able to afford to live in her house in 10 years’ time the way rates are going up.

He says the government is replacing stamp duty, needs more money to build a tram and that her block could be more efficiently used if sub-divided. It all makes economic sense he says. He knows of an apartment in Crace that would be just right for her, but she might not be allowed to bring her cat and she will have to get rid of some furniture. The agent suggests she take out a reverse mortgage. He also talks about a deferred payment option where she could continue to pay her current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when her property is sold.

Jane just wants to live a quiet life in her home of many years, within walking distance of the local shops and her friends and to be able to afford the things she always had. With an election coming up Jane really hopes that enough people realise that what the government is doing with rates is hurting many, many people like her.

“…….a nice young real estate agent knocked on her door……”

Sounds like an another agent appointed by the LDA.

Who is then donating money to the ACT branch of the Liberal party, for federal purposes of course, Mr Coe said so. Act liberals are not benefactors of developer money, indeed they like to pass money onto the NSW branch too hey?

Acton2:23 pm 09 Oct 16

bringontheevidence said :

Acton said :

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Jane Doe has lived all her married life in a modest home in an inner suburb, say Griffith. She bought the home with her husband and together they raised two kids.

Her cottage garden gives her great joy. A few years ago Jane’s husband died and she now lives off his modest government superannuation. She has a small circle of friends she has known for many years, all living close by who pop in regularly for a cup of tea. Jane and her elderly friends are shocked and worried about the way rates are increasing. The annual rates assessment is the largest single bill Jane receives all year. In five years her rates have risen by 73% from $1,598pa in 2011, to now $2,771pa. To pay these rates Jane has to cut down on luxuries. She no longer buys plants for her garden. She doesn’t go to the movies. She has cancelled her subscription to the Woman’s Weekly.

Recently a nice young real estate agent knocked on her door and asked if she would like to move somewhere cheaper. He knows rates are going up and tells her rates will keep on increasing by about 10% every year. He asks Jane if she thinks she will still be able to afford to live in her house in 10 years’ time the way rates are going up.

He says the government is replacing stamp duty, needs more money to build a tram and that her block could be more efficiently used if sub-divided. It all makes economic sense he says. He knows of an apartment in Crace that would be just right for her, but she might not be allowed to bring her cat and she will have to get rid of some furniture. The agent suggests she take out a reverse mortgage. He also talks about a deferred payment option where she could continue to pay her current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when her property is sold.

Jane just wants to live a quiet life in her home of many years, within walking distance of the local shops and her friends and to be able to afford the things she always had. With an election coming up Jane really hopes that enough people realise that what the government is doing with rates is hurting many, many people like her.

Or…

Jane is approached by an estate agent informing her that her modest cottage in Griffith is now worth well over a million dollars. She has the option of staying, knowing that over time the garden will get harder to maintain, the house may be too large for her to properly keep clean and she will be struggling to pay the increased rates that result from her property’s appreciating value (regardless of rate rises).

She asks some friends for advice, and they suggest (like they have) of moving to Kingston Foreshore. She doesn’t like the idea of being somewhere so crowded, so she goes to ask an buyers agent what other options are available.

He suggests that she might want to live in one of the new townhouse or apartment developments going up near her current house in Griffith, Amaya for example. That one has been designed with people like her in mind, it’s got single level apartments and lifts to every floor (even though it’s only 2-3 levels) so she doesn’t have to worry about stairs, big balconies, wide opening doors and wide passageways to make access easy. It’s also in a secure complex so she no longer needs to worry about security. She also likes that it’s in a residential area so noise won’t be a problem.

After speaking to her accountant, she finds out the ACT has a stamp duty concession for older residents to downsize, and that she can put most of the net proceeds from her house sale into her super where the taxman can’t touch it. She’s also planning to put some of it towards that round the world cruise she always wanted, but never thought she could afford.

A day after speaking to the buyer’s agent Jane Doe’s 2016-17 rates notice arrives and is for a staggering $3,073.86. That is a 93% increase over the $1,598 she paid in 2011-12. Jane ponders the idea of selling her house, moving into an apartment and then taking the world cruise she always wanted and had been putting money towards before rates started rising and took away her ability to save.

Jane knows her modest cottage in Griffith is worth over a million dollars, maybe even $1,250,000. The buyer’s agent suggested Amaya, which is in her suburb and looks very attractive. However, Jane is shocked to learn that a three bedroom apartment in Amaya is priced at $1,462,900 and a four bedroom apartment recently sold for $2,150,000. On top of that she will have to pay $74,462 in stamp duty, or perhaps a little less if she is eligible for a concession. Jane knows that any place with a lift is going to have high maintenance costs. What will the annual body corporate fees be she wonders?

So to move from her home to a smaller three bedroom apartment in the same suburb she will be out of pocket by at least $200,000, face high ongoing costs with no chance of a cruise, even to Fiji. Jane is smart enough to realise that the real beneficiaries are going to be the property developer, the real estate agent and the buyer’s agent in the sales and commissions they make out of her. Jane suspects one of them is already planning a trip on the Queen Mary II.

Jane is nobody’s fool and doesn’t like to be taken advantage of so plans to turn the garden hose on the next real estate agent or buyer’s agent who comes down her driveway bearing glossy brochures and telling her how wonderful these rates increases are. .

dungfungus10:09 pm 08 Oct 16

Acton said :

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Jane Doe has lived all her married life in a modest home in an inner suburb, say Griffith. She bought the home with her husband and together they raised two kids.

Her cottage garden gives her great joy. A few years ago Jane’s husband died and she now lives off his modest government superannuation. She has a small circle of friends she has known for many years, all living close by who pop in regularly for a cup of tea. Jane and her elderly friends are shocked and worried about the way rates are increasing. The annual rates assessment is the largest single bill Jane receives all year. In five years her rates have risen by 73% from $1,598pa in 2011, to now $2,771pa. To pay these rates Jane has to cut down on luxuries. She no longer buys plants for her garden. She doesn’t go to the movies. She has cancelled her subscription to the Woman’s Weekly.

Recently a nice young real estate agent knocked on her door and asked if she would like to move somewhere cheaper. He knows rates are going up and tells her rates will keep on increasing by about 10% every year. He asks Jane if she thinks she will still be able to afford to live in her house in 10 years’ time the way rates are going up.

He says the government is replacing stamp duty, needs more money to build a tram and that her block could be more efficiently used if sub-divided. It all makes economic sense he says. He knows of an apartment in Crace that would be just right for her, but she might not be allowed to bring her cat and she will have to get rid of some furniture. The agent suggests she take out a reverse mortgage. He also talks about a deferred payment option where she could continue to pay her current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when her property is sold.

Jane just wants to live a quiet life in her home of many years, within walking distance of the local shops and her friends and to be able to afford the things she always had. With an election coming up Jane really hopes that enough people realise that what the government is doing with rates is hurting many, many people like her.

“…….a nice young real estate agent knocked on her door……”

Sounds like an another agent appointed by the LDA.

dungfungus10:05 pm 08 Oct 16

JC said :

Acton said :

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Jane Doe has lived all her married life in a modest home in an inner suburb, say Griffith. She bought the home with her husband and together they raised two kids.

Her cottage garden gives her great joy. A few years ago Jane’s husband died and she now lives off his modest government superannuation. She has a small circle of friends she has known for many years, all living close by who pop in regularly for a cup of tea. Jane and her elderly friends are shocked and worried about the way rates are increasing. The annual rates assessment is the largest single bill Jane receives all year. In five years her rates have risen by 73% from $1,598pa in 2011, to now $2,771pa. To pay these rates Jane has to cut down on luxuries. She no longer buys plants for her garden. She doesn’t go to the movies. She has cancelled her subscription to the Woman’s Weekly.

Recently a nice young real estate agent knocked on her door and asked if she would like to move somewhere cheaper. He knows rates are going up and tells her rates will keep on increasing by about 10% every year. He asks Jane if she thinks she will still be able to afford to live in her house in 10 years’ time the way rates are going up.

He says the government is replacing stamp duty, needs more money to build a tram and that her block could be more efficiently used if sub-divided. It all makes economic sense he says. He knows of an apartment in Crace that would be just right for her, but she might not be allowed to bring her cat and she will have to get rid of some furniture. The agent suggests she take out a reverse mortgage. He also talks about a deferred payment option where she could continue to pay her current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when her property is sold.

Jane just wants to live a quiet life in her home of many years, within walking distance of the local shops and her friends and to be able to afford the things she always had. With an election coming up Jane really hopes that enough people realise that what the government is doing with rates is hurting many, many people like her.

Nice sob story yes some people may well get ‘hurt’ but many many more will benifit in the long run.

Maybe what we need to be looking at are deferred payment schemes for the elderly wanting to stay in their homes but cannot afford rate increases. Make payment with intrest a condition of any future saw of that property.

Might sound harsh but life is harsh and we do need to look at how money gets raised. Punishing those who move is crazy and some may argue rates based on land value is crazy but what options, realistic options are there.

You really work for the government, don’t you?

bringontheevidence9:40 pm 08 Oct 16

Acton said :

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Jane Doe has lived all her married life in a modest home in an inner suburb, say Griffith. She bought the home with her husband and together they raised two kids.

Her cottage garden gives her great joy. A few years ago Jane’s husband died and she now lives off his modest government superannuation. She has a small circle of friends she has known for many years, all living close by who pop in regularly for a cup of tea. Jane and her elderly friends are shocked and worried about the way rates are increasing. The annual rates assessment is the largest single bill Jane receives all year. In five years her rates have risen by 73% from $1,598pa in 2011, to now $2,771pa. To pay these rates Jane has to cut down on luxuries. She no longer buys plants for her garden. She doesn’t go to the movies. She has cancelled her subscription to the Woman’s Weekly.

Recently a nice young real estate agent knocked on her door and asked if she would like to move somewhere cheaper. He knows rates are going up and tells her rates will keep on increasing by about 10% every year. He asks Jane if she thinks she will still be able to afford to live in her house in 10 years’ time the way rates are going up.

He says the government is replacing stamp duty, needs more money to build a tram and that her block could be more efficiently used if sub-divided. It all makes economic sense he says. He knows of an apartment in Crace that would be just right for her, but she might not be allowed to bring her cat and she will have to get rid of some furniture. The agent suggests she take out a reverse mortgage. He also talks about a deferred payment option where she could continue to pay her current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when her property is sold.

Jane just wants to live a quiet life in her home of many years, within walking distance of the local shops and her friends and to be able to afford the things she always had. With an election coming up Jane really hopes that enough people realise that what the government is doing with rates is hurting many, many people like her.

Or…

Jane is approached by an estate agent informing her that her modest cottage in Griffith is now worth well over a million dollars. She has the option of staying, knowing that over time the garden will get harder to maintain, the house may be too large for her to properly keep clean and she will be struggling to pay the increased rates that result from her property’s appreciating value (regardless of rate rises).

She asks some friends for advice, and they suggest (like they have) of moving to Kingston Foreshore. She doesn’t like the idea of being somewhere so crowded, so she goes to ask an buyers agent what other options are available.

He suggests that she might want to live in one of the new townhouse or apartment developments going up near her current house in Griffith, Amaya for example. That one has been designed with people like her in mind, it’s got single level apartments and lifts to every floor (even though it’s only 2-3 levels) so she doesn’t have to worry about stairs, big balconies, wide opening doors and wide passageways to make access easy. It’s also in a secure complex so she no longer needs to worry about security. She also likes that it’s in a residential area so noise won’t be a problem.

After speaking to her accountant, she finds out the ACT has a stamp duty concession for older residents to downsize, and that she can put most of the net proceeds from her house sale into her super where the taxman can’t touch it. She’s also planning to put some of it towards that round the world cruise she always wanted, but never thought she could afford.

JC9:07 pm 08 Oct 16

Acton said :

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Jane Doe has lived all her married life in a modest home in an inner suburb, say Griffith. She bought the home with her husband and together they raised two kids.

Her cottage garden gives her great joy. A few years ago Jane’s husband died and she now lives off his modest government superannuation. She has a small circle of friends she has known for many years, all living close by who pop in regularly for a cup of tea. Jane and her elderly friends are shocked and worried about the way rates are increasing. The annual rates assessment is the largest single bill Jane receives all year. In five years her rates have risen by 73% from $1,598pa in 2011, to now $2,771pa. To pay these rates Jane has to cut down on luxuries. She no longer buys plants for her garden. She doesn’t go to the movies. She has cancelled her subscription to the Woman’s Weekly.

Recently a nice young real estate agent knocked on her door and asked if she would like to move somewhere cheaper. He knows rates are going up and tells her rates will keep on increasing by about 10% every year. He asks Jane if she thinks she will still be able to afford to live in her house in 10 years’ time the way rates are going up.

He says the government is replacing stamp duty, needs more money to build a tram and that her block could be more efficiently used if sub-divided. It all makes economic sense he says. He knows of an apartment in Crace that would be just right for her, but she might not be allowed to bring her cat and she will have to get rid of some furniture. The agent suggests she take out a reverse mortgage. He also talks about a deferred payment option where she could continue to pay her current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when her property is sold.

Jane just wants to live a quiet life in her home of many years, within walking distance of the local shops and her friends and to be able to afford the things she always had. With an election coming up Jane really hopes that enough people realise that what the government is doing with rates is hurting many, many people like her.

Nice sob story yes some people may well get ‘hurt’ but many many more will benifit in the long run.

Maybe what we need to be looking at are deferred payment schemes for the elderly wanting to stay in their homes but cannot afford rate increases. Make payment with intrest a condition of any future saw of that property.

Might sound harsh but life is harsh and we do need to look at how money gets raised. Punishing those who move is crazy and some may argue rates based on land value is crazy but what options, realistic options are there.

Acton8:33 pm 08 Oct 16

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Jane Doe has lived all her married life in a modest home in an inner suburb, say Griffith. She bought the home with her husband and together they raised two kids. Her cottage garden gives her great joy. A few years ago Jane’s husband died and she now lives off his modest government superannuation. She has a small circle of friends she has known for many years, all living close by who pop in regularly for a cup of tea. Jane and her elderly friends are shocked and worried about the way rates are increasing. The annual rates assessment is the largest single bill Jane receives all year. In five years her rates have risen by 73% from $1,598pa in 2011, to now $2,771pa. To pay these rates Jane has to cut down on luxuries. She no longer buys plants for her garden. She doesn’t go to the movies. She has cancelled her subscription to the Woman’s Weekly.

Recently a nice young real estate agent knocked on her door and asked if she would like to move somewhere cheaper. He knows rates are going up and tells her rates will keep on increasing by about 10% every year. He asks Jane if she thinks she will still be able to afford to live in her house in 10 years’ time the way rates are going up. He says the government is replacing stamp duty, needs more money to build a tram and that her block could be more efficiently used if sub-divided. It all makes economic sense he says. He knows of an apartment in Crace that would be just right for her, but she might not be allowed to bring her cat and she will have to get rid of some furniture. The agent suggests she take out a reverse mortgage. He also talks about a deferred payment option where she could continue to pay her current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when her property is sold.

Jane just wants to live a quiet life in her home of many years, within walking distance of the local shops and her friends and to be able to afford the things she always had. With an election coming up Jane really hopes that enough people realise that what the government is doing with rates is hurting many, many people like her.

dungfungus9:25 am 08 Oct 16

rommeldog56 said :

Barron said :

Yeah, let’s hit the rate payers hard and the pensioners even harder. What happened to the Labor party I knew that represented workers and the underprivileged. Cutting back the pensioner rebate on rates is only going to increase the call on welfare, especially private welfare. If this is happening BEFORE an election what will happen after the election.
Many buildings and sites in the ACT do not pay any type of rates yet we as rate payers are still responsible for the roads and utilities that they use.
My politicians in the ACT work hard, what we need them to do is work smart. Rates hunting is not working smart. They should stop giving us what they “know” we want and actually give us what we want after we have been asked.

Well said. I woke up to “new Labor” – the ACT Labor/Greens – at the 2012 election and voted against them for the 1st time in my 60yo life. Mostly because of the Tram and especially because of the new taxation regime (eg. tripling of Annual Rates) as I had become a self funded retiree 6 months before.

Nothing has changed to send my vote back to ACT Labor/Greens – in fact, ACT Labor has has become even far less likely to regain my vote. I now regard myself as a life long non ACT Labor/Greens voter as they bare no resemblance to the Labor party I once knew.

I am a self-funded retiree also and share your sentiments about the position we find ourselves in regarding the increasing rates (and other municipal charges such as motor-vehicle registration and all the mickey-mouse levies).

I have not forgotten that most of us have probably moved homes at least twice since we started living in Canberra and we paid tens of thousands of dollars in stamp duty.
None of us ever received and FHBGs or concessions yet we continue to subsidise the current generation in their housing aspirations who in turn support the current government (and who can blame them) by paying ever-increasing rates.
Does that sound a bit cynical? Good, you are getting the picture.

I have posted on another thread that I intend to leave Canberra as it is un-affordable to live here for people in my financial situation.
Many others will do the same thing and in the meantime we will have to use most of our previously disposable income to prop up the Territory finances.
Meanwhile, the businesses in the Territory will suffer because of this re-direction of expenditure.

At least I will have the last laugh as my retirement is self-funded. All ACT public servants have an un-funded retirement to “look forward” to thanks to the mis-management of the current government .

rommeldog5612:49 am 08 Oct 16

bringontheevidence said :

Alright, genuine question for those complaining about an inability to pay the increased rates with a fixed income.

Would you be willing to sign up for a deferred payment option from the Government? If an option was provided where you could continue to pay your current rates (indexed to CPI), but the remaining unpaid rates were recorded as a deferred debt to the Government, only to be recovered when your property was sold, would you be willing to agree to the change?

For example Jane Doe might defer $1000 in rates per year for 20 years because she is on her pension, but when she passes away and her children decide to sell the home, the Government would recover the $20,000 plus some interest (at a 3% rate the total would be around 27,000 after 20 years). That way those on a fixed income could avoid the rises, reducing the unequal impact of the change, those who’ve ‘already paid their stamp duty’ still get the gradual 20 year phase in, and everyone benefits from the new policy.

Thinking about this. Thinking……thinking……thinking…….no.

Those on fixed incomes, let alone all home holders have already paid their conveyancing stamp duty. Whether it be the current deferred Annual Rates scheme or a scheme like what u suggest, it really is little different. You still pay. Both are tounter mount to a death tax anyway.

Those homeowners who became self funded retirees prior to the announcement by ACT Labor/Greens of this new tax regime during the 2012 election had no way of seeing that coming. It has totally stuffed up many of their retirement plans/finances. And as a society, arn’t we supposed to be encouraging people to be self funded retirees ? IMHO, if u are living in Canberra, its one of the worst financial decisions you can make. Just encourages people to plan to go onto Federal Gov’t welfare when they retire. And the capping of Annual Rates rises for those on Centrelink payments is, well, disgusting.

I know a number of homeowners on fixed incomes (myself included) – 2 on the aged pension. All are livid about this. Shame they didnt think about that when they voted Labor at the 2012 election really…….

Acton4:09 pm 06 Oct 16

It is obvious to any home owner that they are worse off paying 10%pa higher rates and the higher the rates increases, the worse off they will be. I can’t put it any simpler than this: if income = 100 and rates = 5, that leaves 95 left over. If rates triple to 15 you have 85 left over and less to pay on everything else.

Replacing stamp duty with increased residential rates means that you, the property buyer, are expecting me, the property owner to pay your taxes so you can live in a larger or more expensive house. Higher residential rates are a cross subsidisation where one group (land owners) bears the burden of taxes so that another group (property buyers) can spend more on houses. It is a subsidy pushed by the obvious beneficiaries – property developers, real estate agents, investors and speculators. It is a huge con job the ACT Government has fallen for.

Progressive taxes are based on income and capacity to pay. Rates increases are not based on the home owner’s capacity to pay but on property values as determined by the government. Rates are a regressive form of taxation that hit harder on those with whose property values are increasing faster than their incomes. Most of us. It is an inequitable and unfair form of subsidisation because home owners pay 50-70% rates increases now and higher into the future, so others can avoid stamp duty.

Stamp duty is a choice. If you choose to buy an expensive house you pay higher stamp duty and you pay because you can afford it. Yes, stamp duty is excessive but it should be replaced by a fair system, not an unfairer one. Rates increases of no more than the CPI.

Don’t tell home owners they can afford higher rates because their property value is increasing. We do not pay rates out of our property’s value, but out of our disposable income. Higher rates means the family budget is squeezed and housing becomes less affordable.

Imagine you bought a house, but then the bank doubled, tripled, or quadrupled your mortgage. Residential rates and loan mortgages are a cost like any other cost and have to be paid out of after-tax income, not from the property’s land or market value. Think of the elderly resident on a fixed income or a young family on a tight budget who don’t want to be forced out of their home because of unaffordable, ever-rising rates.

Housing becomes less affordable because of increased property prices and increased ongoing residential rates. Unless your income is rising by 10%pa to keep pace with 10%pa rates increases, then your standard of living is falling. Raising rates by 10%pa means this ACT Government is responsible for a general decline in the standard of living of all home-owning Canberrans now and into the future.

bringontheevidence10:23 am 06 Oct 16

Acton said :

bringontheevidence said :

It’s not ‘rates’ to be used for services, it’s a land tax. And yes, you will pay more in this tax, but less in other taxes like stamp duties.

A land tax is the most efficient way to raise revenue for a Government, bar none. Unfortunately very few Governments ever go down that path because of ignorant fear campaigns like this one (proudly funded by gambling revenue, possibly the most socially damaging of all).

You, your children and your childrens children will benefit from the removal of stamp duties and other wasteful, inefficient taxes for decades to come.

Home owners do not benefit from a reduction in stamp duty because they have already paid it. Instead they are hit by +50-70% rates increases, which impacts on their home budget year after year.
Average rates on houses in the ACT have over just 5 years increased from $1406 to $2152 (53%) with increases across suburbs ranging from 46% in Tuggeranong to over 70% in North and South Canberra.
http://apps.treasury.act.gov.au/budget/budget-2016-2017/budget-booklets/taxreform/changes-in-residential-general-rates-to-date-for-houses-And-units
Any savings in stamp duty, which is only paid once on purchase, is offset by yearly 10% increase in rates. Assuming stamp duty is eventually abolished, you save on a one-off expense, but are paying more overall, for evermore in ongoing yearly rates.
Those who most benefit from the push for a reduction in stamp duty are property developers, real estate agents and speculators.
Why? Because for this cohort stamp duty is a sales cost that goes to the government instead of into their pockets through a corresponding home price rise, profit or commission increase.
If you reduce/abolish stamp duty, home buyers avoid a government tax, the increase in demand leads to an increase in house expenditure, upwards pressure on house prices, resulting in more house sales, profits and commissions. Why else would the Property Council be so supportive? The losers are all existing and future homeowners.
Housing becomes less affordable because of the rise in property prices, increase in rates and impact on family budgets – for us and our children.

Incorrect. Firstly, once fully implemented rates will be a lower overall cost than stamp duties for the same revenue. That’s the whole point. You’re forgetting the ‘hidden’ costs of stamp duty, i.e. the interest on the larger than normal mortgage buyers have to take out to cover the additional cost of stamp duty, the extra rent that needs to be paid while buyers are saving to buy their house, the excess costs buyers face because they are pushed towards larger, more expensive homes early so that they don’t face additional stamp duties when they upsize later on, and the huge costs of people living in unsuitable homes because they don’t want to pay stamp duty when they move suburb closer to work or downsize when their kids move out of home.

And second, most of the headline rate rises are driven by higher property costs. I.e. your asset is worth more!! If you like the Government could have been releasing tonnes of new land on the outskirts to flood the market and keep prices and rates down, but I don’t think that would be your preference. You seem to want the benefits of higher asset value but without the cost of higher rates.

Acton5:27 pm 05 Oct 16

bringontheevidence said :

It’s not ‘rates’ to be used for services, it’s a land tax. And yes, you will pay more in this tax, but less in other taxes like stamp duties.

A land tax is the most efficient way to raise revenue for a Government, bar none. Unfortunately very few Governments ever go down that path because of ignorant fear campaigns like this one (proudly funded by gambling revenue, possibly the most socially damaging of all).

You, your children and your childrens children will benefit from the removal of stamp duties and other wasteful, inefficient taxes for decades to come.

Home owners do not benefit from a reduction in stamp duty because they have already paid it. Instead they are hit by +50-70% rates increases, which impacts on their home budget year after year.
Average rates on houses in the ACT have over just 5 years increased from $1406 to $2152 (53%) with increases across suburbs ranging from 46% in Tuggeranong to over 70% in North and South Canberra.
http://apps.treasury.act.gov.au/budget/budget-2016-2017/budget-booklets/taxreform/changes-in-residential-general-rates-to-date-for-houses-And-units
Any savings in stamp duty, which is only paid once on purchase, is offset by yearly 10% increase in rates. Assuming stamp duty is eventually abolished, you save on a one-off expense, but are paying more overall, for evermore in ongoing yearly rates.
Those who most benefit from the push for a reduction in stamp duty are property developers, real estate agents and speculators.
Why? Because for this cohort stamp duty is a sales cost that goes to the government instead of into their pockets through a corresponding home price rise, profit or commission increase.
If you reduce/abolish stamp duty, home buyers avoid a government tax, the increase in demand leads to an increase in house expenditure, upwards pressure on house prices, resulting in more house sales, profits and commissions. Why else would the Property Council be so supportive? The losers are all existing and future homeowners.
Housing becomes less affordable because of the rise in property prices, increase in rates and impact on family budgets – for us and our children.

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