Still expecting a discount for paying your rates early? Think again

You’re comparing apples and oranges.
The Kambah person has most of their wealth in an appreciating asset (the land) with significant opportunity for growth.
The other person has most of their wealth in a depreciating asset (their house) with less chance for growth.

The person in the expensive suburb may get better services but has significantly less land from which to benefit from.
The government would also get significantly more money per square meter from that expensive area and service delivery would be less per dwelling due to the higher densities and economies of scale.

What you seem to be asking for is a rating scheme on the improved value of land as the Greens have lobbied for.
This would be more difficult to manage and has the massive negative outcome of incentivising people to not improve their land or properties, which is the exact opposite of what we want.

And it’s absolute spin to suggest the change in rates won’t help struggling households into the future.

Firstly, most “struggling” households don’t own property, so aren’t directly affected by the change.

And no, landlords can’t simply raise rents to make them pay it. If rents could be higher, then they already would be, landlords aren’t a charity, they charge the maximum the market will bear.

Secondly, the changes are over twenty years which lessens the impact on lower income property owning households. On average people move every seven years so almost everyone will benefit from the lower stamp duty rates when this occurs.

Thirdly, our rating scheme is progressive, meaning expensive inner city dwellings pay proportionally more.

And finally, all of these together add up to incentives to utilise our land far more efficiently than it has been in the past, it will be much more difficult to sit on expensive land in the future which means that over the long term, property prices will be lower due to higher holding costs and higher density dwellings being built on that expensive land.

Which is a win for all struggling households long term.

The people it won’t benefit is the tiny minority of people who own their own house, have no plans to move ever and don’t want to pay for the necessary revenue our territory needs to run.

I think we will continue to disagree on the new rates model.

Your theoretical positives on the new rates model isn’t being borne out by reality.

There are plenty of struggling home owners with mortgages. So I don’t know why you think struggling homeowners are rare.

Poorer households don’t move every seven years on average. It’s the upwardly mobile who tend to buy a new house more often than average.

The progressive aspects of the rates changes have proved way too gradual in their percentage increase, add to that the ‘fixed base rates charge’ increasing at a much greater rate.

Advocacy groups have raised the inequality of the new rates model. I fully support them in their concern.

The shift from the previous model with Stamp Duty hitting the most expensive House Sales, to instead…..

Charging people based on a fixed annual rates amount that is the same if your house is worth $350 thousand or 3.5 million and topping that charge up with the ‘per square metre’ value of their land, is clearly hitting the poor proportionally harder than the rich.

Even a senior economist I know who supported the change from Stamp Duty, has begun to realise the flaw in the model that the ACT has applied.

They aren’t theoretical positives, they are the obvious outcomes that are already starting to occur.

“There are plenty of struggling home owners with mortgages. So I don’t know why you think struggling homeowners are rare”

Because the data shows it to be the case during this period of abnormally low interest rates going on a decade now?

https://www.canberratimes.com.au/national/act/how-much-mortgage-stress-is-in-your-postcode-20180911-p5030e.html

Canberra has very low levels of mortgage stress and some of those stressed actually includes relatively well off people who have overextended themselves.

What are you basing your statement on poorer houses not moving on? People move for all sorts of reasons not related to upsizing, including to move closer to new jobs, coincidentally another of the key benefits to the rating change.

Charging people a fixed charge isn’t unfair, it actually recognises the fact that a household receives a number of “fixed” services that apply to all. It would be more unfair not to have such a fixed charge.

“Even a senior economist I know who supported the change from Stamp Duty, has begun to realise the flaw in the model that the ACT has applied.”

Yes, you might be able to point to a single economist with an axe to grind. I can point to the vast majority of economists who would support the ACT’s move to a broad based land tax as a perfect example of real taxation reform.

“It’s especially silly if there is no discount for payment in full.”
That would be Barrs “Fairer Revenue” initiative, spun as “an equity measure”.

So you rates have tripled hey?

No? Didn’t think so.