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Are the rates tripling?

By johnboy - 24 September 2013 21

The Liberals’ Brendan Smyth is triumphantly pointing to rising rates as proof rates will triple (as of course they will over sufficiently long time frames, just as all of us will die).

Mr Barr can end this argument today. Surely, before he embarked on his tax changes, he calculated what the effect on the rates of an average Canberra household would be.

“Many people have contacted me as well as media outlets quoting huge rates increases.

“There have also been significant increases in commercial rates well beyond the expectation of the sector. All at a time when the revenue take from conveyancing has increased. So much for a tax that is supposed to be being abolished!

“The facts show rates must triple. The ball is now in Andrew Barr’s court to prove they won’t,” Mr Smyth concluded.

What’s Your opinion?


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21 Responses to
Are the rates tripling?
watto23 9:14 am 26 Sep 13

chewy14 said :

milkman said :

gazket said :

More than 1/2 the people in the A.C.T. didn’t mind if their rates trippled, There happy to pay other wise the Liberals would of won the election. That’s Labour thinking right there.

Oh don’t worry, it’s only the ‘rich’ who’ll be paying.

(Getting into the spirit of Labor thinking)

It’s not necessarily the ‘rich’ who’ll be paying, its those who hold expensive inner city land that will be paying the most. If you don’t need to hold that land then you can sell up and move to a cheaper area.

And it won’t cost you any extra taxes to do so which is the point. Tax on property sales only affects those who sell. So why should they be taxed so the rest of us can have services? Rates is the fairest way for the ACT government to tax people. In the end rates will cost us more, but it will be cheaper to buy intially, which i think is a good thing.

Queen_of_the_Bun 10:46 pm 25 Sep 13

gazket said :

More than 1/2 the people in the A.C.T. didn’t mind if their rates trippled, There happy to pay other wise the Liberals would of won the election. That’s Labour thinking right there.

This is why Labor wants to put more money into education. Sigh.

Innovation 3:04 am 25 Sep 13

It is ironic that many homeowners on fixed incomes will eventually be forced to sell their homes because of the new rates structure while many public housing tenants, at least in past years, have been allowed to stay in their houses while they have had significant growth in household income.

Even the Commonwealth Government, when they introduced CGT, exempted existing home owners. Of course the ACT Government would argue that it would be too hard, too expensive or take too long to move to another revenue base if they exempted existing homeowners or at least introduced a lower consistent rate for existing home owners.

chewy14 7:22 pm 24 Sep 13

milkman said :

gazket said :

More than 1/2 the people in the A.C.T. didn’t mind if their rates trippled, There happy to pay other wise the Liberals would of won the election. That’s Labour thinking right there.

Oh don’t worry, it’s only the ‘rich’ who’ll be paying.

(Getting into the spirit of Labor thinking)

It’s not necessarily the ‘rich’ who’ll be paying, its those who hold expensive inner city land that will be paying the most. If you don’t need to hold that land then you can sell up and move to a cheaper area.

Thumper 6:53 pm 24 Sep 13

gazket said :

More than 1/2 the people in the A.C.T. didn’t mind if their rates trippled, There happy to pay other wise the Liberals would of won the election. That’s Labour thinking right there.

You forgot the sarc tags…

milkman 6:28 pm 24 Sep 13

gazket said :

More than 1/2 the people in the A.C.T. didn’t mind if their rates trippled, There happy to pay other wise the Liberals would of won the election. That’s Labour thinking right there.

Oh don’t worry, it’s only the ‘rich’ who’ll be paying.

(Getting into the spirit of Labor thinking)

pepmeup 6:05 pm 24 Sep 13

I think the less than 150k is for town houses and multi units where each unit pays a % of the total block. Also during the 2012 election I had a few Labor candidates tell me it was a fair system because the rich people on big blocks pay more. People with higher AUVs always paid more this way they pay much more. Also it assumes its only the rich that live on blocks with high AUVs, my AUV is $560k we could have a three bed one bath on that block like our next door neighbors. Just because people decide to live in certain suburbs does not make them rich

Tetranitrate 4:48 pm 24 Sep 13

pepmeup said :

With the new progressive tax rates, shown here:

http://apps.treasury.act.gov.au/taxreform/residential-general-rates-factsheet

it is easy to see that those with a AUV of more than $450k will see huge jumps in Rates while those with lower AUVs will see lower increases or in some cases savings. from memory the old rate was about .25% across the board where now those with AUVs below $150,000 only pay .23006% and everyone else pays more.

So the more your land is worth the more you pay with both the rate and the AUV being higher. The big problem with this is that the higher rates are in suburbs in the inner north and inner south. the areas that are not getting any new infrastructure and have poorly maintained existing amenities like bad or missing footpaths.

I don’t really see why rates or land tax should be ‘progressive’ in the first place, it’s not a take on an income stream, it’s tax on holding an asset and it’s based only on part of the value of the asset to begin with.

The government really ought to just roll land-tax and rates into a single land tax of X% of unimproved land value per year – if they want to retain the fixed charge for rates on top of that fair enough.
‘progressive’ taxes on assets like that doesn’t serve much purpose when we already have progressive income taxation and it distorts what would otherwise be a perfectly efficient tax.

Chop71 4:48 pm 24 Sep 13

AUV’s under 150K???? they must be the really really small postage stamps?

gazket 3:43 pm 24 Sep 13

More than 1/2 the people in the A.C.T. didn’t mind if their rates trippled, There happy to pay other wise the Liberals would of won the election. That’s Labour thinking right there.

pepmeup 3:34 pm 24 Sep 13

With the new progressive tax rates, shown here:

http://apps.treasury.act.gov.au/taxreform/residential-general-rates-factsheet

it is easy to see that those with a AUV of more than $450k will see huge jumps in Rates while those with lower AUVs will see lower increases or in some cases savings. from memory the old rate was about .25% across the board where now those with AUVs below $150,000 only pay .23006% and everyone else pays more.

So the more your land is worth the more you pay with both the rate and the AUV being higher. The big problem with this is that the higher rates are in suburbs in the inner north and inner south. the areas that are not getting any new infrastructure and have poorly maintained existing amenities like bad or missing footpaths.

beardedclam 2:43 pm 24 Sep 13

They are all jerks.
I am selling all my houses and moving away from the ACT. Not far, just over the border somewhere and keep working in my ACT job. I would rather pay rates/stamp duty/whatever I have to pay for owning a house to NSW. Mainly because the Revenue Office in Canberra is full of idiots that shouldn’t have jobs.

watto23 11:37 am 24 Sep 13

While rates are indeed rising, no stamp duty should have a downward effect on house prices and also allow for better budgeting. look at how the federal budget went relying on things that didn’t occur and also the reduced income created by the previous government.

I don’t want to pay for more taxes, but if things get done around town and the place is better for it, i’ll be happier than paying less tax and living in a pure functional but lifeless city.

Relying on sales tax on properties means when times are good housing sales are up, the government gets more money. When they are bad it has less money to solve issues, that are usually more numerous. What the country needs to do is get rid of handouts and subsidies to people and sort out the amount of tax actually collected so people can afford what they need to pay for.

Tax reform is a nice idea until politicians realise some of it might be unpopular and then they don’t do it.

HiddenDragon 10:25 am 24 Sep 13

With the politically convenient concept of “progressivity” having been introduced to residential rates, the tripling will occur somewhat more quickly for some, than for others – and from what I hear, even more quickly for some commercial property owners. The latter, if it goes that way, will be sadly ironic for those investors who enthusiastically embraced (i.e. were sucked in by) the new rates/land tax scheme.

With the federal budget under increasing pressure, and with the Coalition and Labor, federally, both having spoken against raising and/or broadening the GST, it is difficult to see State and Territory budgets receiving significant additional federal funding. That being the case, and with company town Canberra facing the serious prospect of a recession (with consequent problems for an ACT Budget already in deficit), it is time for all players in ACT politics to start talking hard facts to the public. Labor and the Green need to be honest about the longer term costs of their policies, plans and promises, and the Liberals, if they want to go on banging the drum about rates, need to present a clear alternative, including some very significant and achievable cuts in spending.

Garfield 10:00 am 24 Sep 13

The issue with rates tripling was always the timeframe. Labor was steadfastly refused to release any modelling, pretty much sticking to the line that the tax reforms would happen over 20 years, as that was the timeframe that they had planned to phase out stamp duty. The Libs were saying that it would happen over 10 years as that was what was recommended in the Quinlan review. I know my rates are looking set to triple over 11 years at the rate they have been increasing since the reform was introduced, and my increases have been more modest than some other people I’ve heard about.

I crunched the numbers back during last years campaign and it showed that compared to the Quinlan Review (and remember he was an ACT Labor Treasurer) the government was actually proposing to tax us more. The review said it would be fair for rates to triple over 10 years if stamp duty was also phased out over 10 years, but the Labor government set us on course to triple rates over 10 years while not pahsing out stamp duty for 20 years.

If they believed that it was necessary to raise the extra revenue to pay for their spending initiatives they should have had the courage to say so. I know I would have respected them more. The Libs don’t get off scott free either. All they did was run a big scare campaign without offering any alternative view regarding tax reform.

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