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Residential rates up only 4.5pc but levies on rise

By Charlotte Harper - 7 June 2016 62

Homes

ACT home owners will be relieved to learn that residential rates will rise by 4.5 per cent rather than 8.75 per cent as flagged in the last Budget, however unit owners are set to contend with larger increases and all rate payers will face some unexpected hits to their hip pockets in the form of new and increased levies.

All property owners will pay the new annual $30 Safer Families Levy as well as increases to the Fire and Emergency Services Levy and Victims Services Levy of around $10 apiece as well as to the Ambulance Levy of between $5 (individuals) and $10 (families).

The Victims Services Levy will rise by a further $10 in 2017-18.

General rates will rise by an average of 4.5 per cent for residential properties in 2016-17, and an average of 7 per cent for commercial properties. Residential rates are expected to rise by a further 7 per cent each year for the next five years.

For units only, a change in the rates methodology will also add around $150 on average in 2017-18 and $115 on average in 2018-19. The Government will change the general rates calculation for multi-unit dwellings to base it on the total average unimproved value of the land rather than the individual average unimproved value of the unit. This is designed to lead to greater equity in general rates paid between houses and units.

Commercial rates are expected to rise on average by 6 per cent each year.

The Safer Families Levy and increases to existing levies will billed via Canberra property owners’ rates bills.

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62 Responses to
Residential rates up only 4.5pc but levies on rise
henryans 3:41 pm 08 Jun 16

Will be back to double digit increases next year if Barr and co can con the Canberra voters again. Green social engineering costs big coin and delvers no actual economic benefit, just fantasy left wing ideology.
If by chance the greens and labor get in again, then LR will bankrupt us

Mysteryman 1:22 pm 08 Jun 16

Andrew Barr had the hide to claim on radio this afternoon that a reduction in stamp duty and payroll tax evens up the rates rises and means Canberra house owners aren’t disadvantaged. What tosh! Canberrans move house once every 12 years or so on average. So the stamp duty reduction benefit should be divided by 12. While the 4.5 per cent rates rise applies every year. A smug and lazy government.

Andrew Barr is the poster boy for “out of touch”. It’s laughable.

chewy14 11:14 am 08 Jun 16

switch said :

tooltime said :

The one truly good economic policy that Labor had of removing stamp duties seems to have now been squibed into the never never.

They can’t even stick with their good decisions for more than a year or two.

No, you have got that wrong. The program of stamp duty reduction continues this year. From the Canberra Times yesterday:

“This year’s cuts to stamp duty take effect immediately, and will mean someone buying a $500,000 house will from Wednesday pay about $13,500 in stamp duty to the government, $1100 less than the same buyer would have paid a day earlier. Over the coming five years, the amount will continue to fall modestly, to $10,000 in 2021-22.

A buyer of a $1 million house pays $42,200 in stamp duty from Wednesday and $33,500 in stamp duty in five years.

There is better news for people buying commercial property worth less than $1.5 million, whose stamp duty will be halved in 2017-18 and abolished altogether a year later.”

http://www.canberratimes.com.au/act-news/act-budget-2016-andrew-barr-offers-home-owners-rates-breather-in-election-year-20160607-gpdhj9.html

The “program” continues but at a slower pace, which means it’s highly likely it will never be completed.

We were already talking about a reform that they were going to phase in over a 20 year time frame. For a government that has a 4 year term, that’s already an eternity, now even longer.

What’s the bet that this extention becomes even longer? What’s the bet that they lose government at some stage and the changes are stopped or reversed in the need for easy revenue?

They’ve backed down here simply to placate voters in an election year. It’s a horrible decision.

devils_advocate 9:44 am 08 Jun 16

mapinact said :

Loviatar said :

Masquara said :

The table on page 227 of 2016/17 Budget Paper 3 shows an estimated increased of 35% in Residential General Rates revenue between 2015/16 and 2019/20 – the relatively low increase in this election year is, no doubt, entirely coincidental.

By 2019/20 revenue from Residential Conveyances is still estimated to be nearly $213m. – so eliminating that, as promised by the Government when it began “tax reform”, would require a further 57% increase in Residential General Rates, in addition to the annual indexation increases based on the Wage Prixe Index.

I wonder if ACT Voters/Ratepayers will ever get sick and tired of being in such a cynical way re Rates. Its almost the ultimate insult. Nah, of course they won’t.

They are just so rusted on Labor here that this ACT labor/Greens Gov’t knows that it can get away with anything nowday’s.

Even though I am what you may call rusted on, in all fairness what do you reckon the Libs would do differently? And no clap trap about lightrail, whilst a big headline figure, the annual figure is not that substantial in the overall budget context.

The libs are more likely to govern for the territory as a whole, rather than their small inner north fanbase. They are also more likely to understand that you can’t tax your way to prosperity; in order to generate tax revenue, you have to allow people to actually engage in businesses that generate the underlying income in the first place. Taxing the bejeesus out of everyone each time they set foot outside their front door is not the way to do that.

devils_advocate 9:41 am 08 Jun 16

Masquara said :

The table on page 227 of 2016/17 Budget Paper 3 shows an estimated increased of 35% in Residential General Rates revenue between 2015/16 and 2019/20 – the relatively low increase in this election year is, no doubt, entirely coincidental.

By 2019/20 revenue from Residential Conveyances is still estimated to be nearly $213m. – so eliminating that, as promised by the Government when it began “tax reform”, would require a further 57% increase in Residential General Rates, in addition to the annual indexation increases based on the Wage Prixe Index.

No doubt there would be some growth in rates revenue resulting from the growth in the number of blocks of land on which rates are charged.

However, as a ratepayer, I am definitely not “relieved” about a 4.5 per cent increase.

This is a huge cost impost given that we are currently paying both stamp duty and rates. It’s also regressive because the cost of providing services to more ‘valuable’ blocks is not directly proportional to the rates valuation of the block; and while some owners of more valuable blocks are indeed likely to be more wealthy, there would be others who pay the punitive rates (and rate rises) just because they’ve been living on their quarter acre block in the boondocks for decades and it’s now become inner city.

pajs 8:52 am 08 Jun 16

tooltime said :

The one truly good economic policy that Labor had of removing stamp duties seems to have now been squibed into the never never.

They can’t even stick with their good decisions for more than a year or two.

No, you have got that wrong. The program of stamp duty reduction continues this year. From the Canberra Times yesterday:

“This year’s cuts to stamp duty take effect immediately, and will mean someone buying a $500,000 house will from Wednesday pay about $13,500 in stamp duty to the government, $1100 less than the same buyer would have paid a day earlier. Over the coming five years, the amount will continue to fall modestly, to $10,000 in 2021-22.

A buyer of a $1 million house pays $42,200 in stamp duty from Wednesday and $33,500 in stamp duty in five years.

There is better news for people buying commercial property worth less than $1.5 million, whose stamp duty will be halved in 2017-18 and abolished altogether a year later.”

http://www.canberratimes.com.au/act-news/act-budget-2016-andrew-barr-offers-home-owners-rates-breather-in-election-year-20160607-gpdhj9.html

rommeldog56 11:43 pm 07 Jun 16

The fact that you can’t see past short term self interest doesn’t make it a bad decision.

Every objective view of the economics and the overall effect of getting rid of stamp duty shows its the right thing to do. This change in tack is the poor effort to pander to the usual populist over substance politics that we’ve become all too familiar with.

Its far, far more than the “short sighted self interest” claim that u use to justify objections. Its long term – for 20+ years.

As a self funded retiree, my modest pension increases at no more than CPI – probably a bit less actually. When I purchased my house, 4 years ago, I paid the full Stamp Duty (as that was before this new scheme of 10% avg. Rate increases pa for 20+ years was even flagged).

Now, the avg. 10%pa increases in Annual Rates + these new “levies” far, far, far exceeds my pension CPI based increases – and that’s with out all the other ACT Gov’t charges that increase annually too, like car rego & parking fees.

So yeah – self interest, but certainly not “short sighted as you claim.

The reduction in stamp duty and increases in annual rates/levies might be a cunning revenue raising move by the ACT Labor/Greens Gov’t, but making existing homeowners pay for their stamp duty again isn’t. Its just legalised theft.

chewy14 10:06 pm 07 Jun 16

Madders said :

tooltime said :

The one truly good economic policy that Labor had of removing stamp duties seems to have now been squibed into the never never.

They can’t even stick with their good decisions for more than a year or two.

Thats because it wasn’t a “good decision”. They have done this because (a) It’s an election year and they know ACT Ratepayers/voters are gullible and easily bribed, and (b) they know that the claim by ACT Labor/Greens that the avg.10%pa for 20+ years of rises in Annual Rates would be “Revenue Neutral” with the reduction in Stamp Duties is incorrect. Its bollocks. They Lied. Maybe a minor attack of the guilts.

The fact that you can’t see past short term self interest doesn’t make it a bad decision.

Every objective view of the economics and the overall effect of getting rid of stamp duty shows its the right thing to do. This change in tack is the poor effort to pander to the usual populist over substance politics that we’ve become all too familiar with.

rommeldog56 8:25 pm 07 Jun 16

tooltime said :

The one truly good economic policy that Labor had of removing stamp duties seems to have now been squibed into the never never.

They can’t even stick with their good decisions for more than a year or two.

Thats because it wasn’t a “good decision”. They have done this because (a) It’s an election year and they know ACT Ratepayers/voters are gullible and easily bribed, and (b) they know that the claim by ACT Labor/Greens that the avg.10%pa for 20+ years of rises in Annual Rates would be “Revenue Neutral” with the reduction in Stamp Duties is incorrect. Its bollocks. They Lied. Maybe a minor attack of the guilts.

chewy14 8:13 pm 07 Jun 16

The one truly good economic policy that Labor had of removing stamp duties seems to have now been squibed into the never never.

They can’t even stick with their good decisions for more than a year or two.

JC 8:04 pm 07 Jun 16

Loviatar said :

Masquara said :

The table on page 227 of 2016/17 Budget Paper 3 shows an estimated increased of 35% in Residential General Rates revenue between 2015/16 and 2019/20 – the relatively low increase in this election year is, no doubt, entirely coincidental.

By 2019/20 revenue from Residential Conveyances is still estimated to be nearly $213m. – so eliminating that, as promised by the Government when it began “tax reform”, would require a further 57% increase in Residential General Rates, in addition to the annual indexation increases based on the Wage Prixe Index.

I wonder if ACT Voters/Ratepayers will ever get sick and tired of being in such a cynical way re Rates. Its almost the ultimate insult. Nah, of course they won’t.

They are just so rusted on Labor here that this ACT labor/Greens Gov’t knows that it can get away with anything nowday’s.

Even though I am what you may call rusted on, in all fairness what do you reckon the Libs would do differently? And no clap trap about lightrail, whilst a big headline figure, the annual figure is not that substantial in the overall budget context.

Masquara 7:40 pm 07 Jun 16

Andrew Barr had the hide to claim on radio this afternoon that a reduction in stamp duty and payroll tax evens up the rates rises and means Canberra house owners aren’t disadvantaged. What tosh! Canberrans move house once every 12 years or so on average. So the stamp duty reduction benefit should be divided by 12. While the 4.5 per cent rates rise applies every year. A smug and lazy government.

rommeldog56 6:59 pm 07 Jun 16

Masquara said :

The table on page 227 of 2016/17 Budget Paper 3 shows an estimated increased of 35% in Residential General Rates revenue between 2015/16 and 2019/20 – the relatively low increase in this election year is, no doubt, entirely coincidental.

By 2019/20 revenue from Residential Conveyances is still estimated to be nearly $213m. – so eliminating that, as promised by the Government when it began “tax reform”, would require a further 57% increase in Residential General Rates, in addition to the annual indexation increases based on the Wage Prixe Index.

I wonder if ACT Voters/Ratepayers will ever get sick and tired of being in such a cynical way re Rates. Its almost the ultimate insult. Nah, of course they won’t. They are just so rusted on Labor here that this ACT labor/Greens Gov’t knows that it can get away with anything nowday’s.

dungfungus 4:56 pm 07 Jun 16

Rates bad. Levies good.

HiddenDragon 4:33 pm 07 Jun 16

The table on page 227 of 2016/17 Budget Paper 3 shows an estimated increased of 35% in Residential General Rates revenue between 2015/16 and 2019/20 – the relatively low increase in this election year is, no doubt, entirely coincidental.

By 2019/20 revenue from Residential Conveyances is still estimated to be nearly $213m. – so eliminating that, as promised by the Government when it began “tax reform”, would require a further 57% increase in Residential General Rates, in addition to the annual indexation increases based on the Wage Prixe Index.

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