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Are the rates tripling?

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.


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21 Responses to Are the rates tripling?
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poetix poetix 10:37 pm 11 Jan 14

rommeldog56 said :

Way to go poetix. Paragraphs are just so important. Obviously, the substantive issues are not.

Is it any wonder that Governments, Federal Government and in particular, the ACT Government, get away with such poor decisions and can not be held accountable. Sorry, no paragraphs again.

It is important that a comment is able to be read easily, without the reader feeling she is trapped within a giant python. Form and content are inseparable.

It is often the case that people who lose the plot post huge paragraphs without considering the reader. That is why I apologised for commenting, based on a glitch that seemed to place you in that category.

rommeldog56 rommeldog56 10:02 pm 11 Jan 14

Way to go poetix. Paragraphs are just so important. Obviously, the substantive issues are not. Is it any wonder that Governments, Federal Government and in particular, the ACT Government, get away with such poor decisions and can not be held accountable. Sorry, no paragraphs again.

poetix poetix 8:13 pm 11 Jan 14

poetix said :

rommeldog56 said :

watto23 said :

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.

So, it’s ok for me, who stupidly purchased a house in Canberra 26 months ago (before this potential trippling of Annual Rates was known !), to effectively pay twice – or more – for that stamp duty, is it ? How is that a fairer taxation system ?

Sounds more like legalised theft to me. Good news for people trying to buy – can only be bad news if you already own a place.

And services, maintain what services ?

The poor state of road resurfacing perhaps, a probably loss making light rail for Gungahlan ? Services have gone backwards, they have not been maintained to the level they were when I was paying Annual Rates 10+ years ago. Or is it signing up to national initiatives like Gonksi without having the $ in the Territory budget to cover the ACTs co-contribution because the territory budget is well into the red ?

What about the wasted money on that stupid hot air balloon thingy ? Stupid speed humps/pads appearing everywhere to no apparent avail, far more Legislative Assembly members and Ministers to come, etc. I’m afraid that Annual Rates will continue to skyrocket – there is no choice if you look at what the Gallagher Government spends our money on and the cost of the Light Rail.

Yep – the so called “fairer” taxation system is so “fair”, it hasn’t been adopted by any other State.

Just as well voters/Rate payers in Canberra are so apathetic.

Some of the comments on Riot Act that seem to support the progressive abolution of stamp duty and rolling that into annual Rates are naive – or just plain stupid. ACT Governments will never be able to stop dramatically increasing annual Rates here each year now that they are loosing revenue from Stamp Duties. The potential pool of money is just far,far too tempting and their economic management skills just so, so lacking.

There is no tax on paragraphs.

I am terribly sorry, rommeldog56. It looked as if you had written a rave without any spacing, but when I quoted you, lots of lovely paragraphs appeared!

This is passing strange…

poetix poetix 7:59 pm 11 Jan 14

rommeldog56 said :

watto23 said :

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.

So, it’s ok for me, who stupidly purchased a house in Canberra 26 months ago (before this potential trippling of Annual Rates was known !), to effectively pay twice – or more – for that stamp duty, is it ? How is that a fairer taxation system ?

Sounds more like legalised theft to me. Good news for people trying to buy – can only be bad news if you already own a place.

And services, maintain what services ?

The poor state of road resurfacing perhaps, a probably loss making light rail for Gungahlan ? Services have gone backwards, they have not been maintained to the level they were when I was paying Annual Rates 10+ years ago. Or is it signing up to national initiatives like Gonksi without having the $ in the Territory budget to cover the ACTs co-contribution because the territory budget is well into the red ?

What about the wasted money on that stupid hot air balloon thingy ? Stupid speed humps/pads appearing everywhere to no apparent avail, far more Legislative Assembly members and Ministers to come, etc. I’m afraid that Annual Rates will continue to skyrocket – there is no choice if you look at what the Gallagher Government spends our money on and the cost of the Light Rail.

Yep – the so called “fairer” taxation system is so “fair”, it hasn’t been adopted by any other State.

Just as well voters/Rate payers in Canberra are so apathetic.

Some of the comments on Riot Act that seem to support the progressive abolution of stamp duty and rolling that into annual Rates are naive – or just plain stupid. ACT Governments will never be able to stop dramatically increasing annual Rates here each year now that they are loosing revenue from Stamp Duties. The potential pool of money is just far,far too tempting and their economic management skills just so, so lacking.

There is no tax on paragraphs.

funbutalsoserious funbutalsoserious 7:45 pm 11 Jan 14

+1000 for rommeldog56’s comments.

rommeldog56 rommeldog56 6:48 pm 11 Jan 14

watto23 said :

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.

So, it’s ok for me, who stupidly purchased a house in Canberra 26 months ago (before this potential trippling of Annual Rates was known !), to effectively pay twice – or more – for that stamp duty, is it ? How is that a fairer taxation system ? Sounds more like legalised theft to me. Good news for people trying to buy – can only be bad news if you already own a place. And services, maintain what services ? The poor state of road resurfacing perhaps, a probably loss making light rail for Gungahlan ? Services have gone backwards, they have not been maintained to the level they were when I was paying Annual Rates 10+ years ago. Or is it signing up to national initiatives like Gonksi without having the $ in the Territory budget to cover the ACTs co-contribution because the territory budget is well into the red ? What about the wasted money on that stupid hot air balloon thingy ? Stupid speed humps/pads appearing everywhere to no apparent avail, far more Legislative Assembly members and Ministers to come, etc. I’m afraid that Annual Rates will continue to skyrocket – there is no choice if you look at what the Gallagher Government spends our money on and the cost of the Light Rail. Yep – the so called “fairer” taxation system is so “fair”, it hasn’t been adopted by any other State. Just as well voters/Rate payers in Canberra are so apathetic. Some of the comments on Riot Act that seem to support the progressive abolution of stamp duty and rolling that into annual Rates are naive – or just plain stupid. ACT Governments will never be able to stop dramatically increasing annual Rates here each year now that they are loosing revenue from Stamp Duties. The potential pool of money is just far,far too tempting and their economic management skills just so, so lacking.

watto23 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 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 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 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 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 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 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 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 Chop71 4:48 pm 24 Sep 13

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

gazket 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 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 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 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 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.

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