18 July 2022

What your rates bill will be in 2022-23

| Ian Bushnell
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Housing from above

Canberra rates have risen on average by 3.75 per cent but vary from suburb to suburb. Photo: Michelle Kroll.

Ratepayers in some Canberra suburbs will actually pay less this financial year, according to the ACT Government’s complete list of annual bills for houses and units (see below).

Rates rose by an average of 3.75 per cent on 1 July, but bills will vary widely across the Territory, depending on the property’s type, size and location.

House owners in Taylor in the north will enjoy a -4 per cent drop in rates, down $106 to $2441, while for those in units, the rates bill will be $1761, down $18, or -1 per cent.

In Belconnen, Weetangara residents will pay slightly less, down -1 per cent or $25 to $3694.

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In Canberra’s newest suburb, Whitlam in the Molonglo Valley, where so far there are only houses, the rates bill will fall -2 per cent or $48 to $2572.

A few suburbs will stay roughly the same as last year – Calwell in the south ($2292) and Throsby in the north ($2598) for houses, and Moncrieff ($1627) in the north for units.

But most property owners will face a rates rise, ranging from 1 per cent to a peak of 11 per cent across houses and units.

Unsurprisingly the affluent inner suburbs will be forking out the most.

Those lucky enough to own a house in exclusive Forrest will pay the highest rates bill – $12,054, up $467 or 4 per cent.

It is in a league of its own, with its inner south neighbours the next highest: Red Hill $7164 (up 3%), Griffith $7314 (up 7%) and Yarralumla $7440 (up 5%).

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Weston Creek, where property values have skyrocketed over the past couple of years, has incurred some of the biggest increases.

Duffy and Fisher jumped 8 per cent to close in on $3000 at $2981 and $2932, while Stirling surged 7 per cent to $2898 and Weston, Waramanga and Rivett rose 6 per cent to $2903, $2896 and $2682.

The Woden Valley has also been a big mover in house prices and the rates increases reflect this with Torrens ($3597) jumping 7 per cent and Lyons ($3802), Phillip ($2719) and Mawson ($3743) rising 6 per cent.

Gungahlin suburbs also had their fair share of hefty increases.

Amaroo leapt 7 per cent to $2448, and Bonner ($2117), Casey ($2269), Crace ($2459), Harrison ($2452) and Moncrieff ($2200) all rose 6 per cent.

In Belconnen, Evatt ($2483) incurred the biggest rise at 6 per cent, followed by Giralang ($2723) and Spence ($2368) at 5 per cent.

Issacs leads the units rate rises, surging 11 per cent to $3245, followed by Garran ($2278, up 9 per cent) and Yarralumla ($4824), Narrabundah ($2317), Deakin ($2708) and Macarthur($2233) all up 7 per cent.

Rates 2022-23

ACT rates 2022-23. Image: ACT Government.

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To ACT Revenue: Could you please include in the valuation report the exact location in my garden your valuation officer discovered the presence of a goldmine, a diamond mine or an oil rich reserve. Much appreciated. In return I will donate to ACT Revenue 10% of all profits as a finder’s fee. On the other hand, if no such luck, please stop increasing my land valuation as if it is a money growing tree orchard. All I have on it a a Cherry tree (and the birds eat all the cherries – all welcome including the ACT revenue).

All Sorted, even assuming no gold mine is found, my offer to purchase at cost remains, yet continues to receive no reply nor reason for your silence so we know you are dissembling at best.

Reality is, you feel entitled to your capital gains; You know they are there, but you want not 99.5% of your untaxed asset (returning over 8% p.a.) but even the last 0.5%, at the expense of your fellow citizens.

There are many words available to describe that level of greed. I’ll leave it there.

As I keep saying I do not treat my home as an asset. It was purchased with fully taxed & hard earned $$$. What sale value my house has at the moment is irrelevant to me & in any case not determined by the ACT Revenue UV valuation but the real estate market valuation. Your choice to treat your home as a financial asset, and perhaps the reason why you would prefer to sell & buy without paying stamp duty on repeat sell/buy cycles. Don’t force that mentality on others, not everyone thinks like that (you are indeed special).

Allsorted,
As posted elsewhere, if you don’t see your home as an asset, you can easily use some of the value of that property to fully cover any tax bill that comes your way.

As you don’t see your house as an asset, this doesn’t affect you in the slightest correct?

All Sorted, this is really to try to explain some stuff to you, even though my terms may be blunt.

“I do not treat my home as an asset”. I bet you take care of it. How you say you treat your home is immaterial to what it is, literally a Real Asset, “a tangible asset with intrinsic value”.

“purchased with fully taxed & hard earned $$$”. Who didn’t?
You get taxed on earnings (interest) on money in the bank, and that was “fully taxed & hard earned” money too. Now you own property, you don’t even have to work hard, just sit and watch your wealth rise.

“sale value my house has at the moment is irrelevant to me”. I pay little attention to my home value either, because I do not plan to move now. What does that have to do with whether it has a value?

“[and it] is not determined by the ACT Revenue UV valuation but the real estate market valuation.” Here lies one of your great fallacies. Have you asked yourself how UV is obtained? It is from the real estate market, as evaluated and advised by professionally accredited valuers, not arbitrarily by ACT Revenue. I have noticed for years that these independent valuations invariably lie below selling prices for the same vacant blocks in the same year. So, your UV is effectively from the authority you cited, and is probably below the real current market. Be happy.

I don’t treat my home as a trading asset but I’m not blind either; it is a capital asset I hold. My accountant and I make sure I pay legally required taxes on my investments. Who wants to pay more? However, when I have paid more tax I notice also that I have just got richer in that time.

The nub is exposed in your other post: you don’t want to pay tax, it is all so unfair.
You are in profit on your purchase, you have the resources to meet your legal liability, so you whinge on Riotact about the injustice of it all, from being still more wealthy than many other people.

Sweet dreams.

Which of the following points I made do you dispute?
1. Rates in the ACT are linked to Unimproved Average Value of land.
2. From 2021 UAVs have risen across Canberra suburbs by 40-50-60%. Verified from the link I posted.
3. For properties where UAvs go up by 40-50-60%, rates will also rise.
4. Rate rises of this magnitude would cause great hardship to many households.
My opinion is that this is extortionate, inequitable and wrong. You have an opposite opinion, which I neither understand or agree with. Do you want our rates to rise by this amount even though it causes hardship?

Acton,
Clearly with regards to 4, you don’t understand what “hardship” actually means.

You are literally complaining that people whose properties have also increased in value by 40,50,60% will have to pay some more tax.

That it’s unfair for people who have made windfall gains of hundreds of thousands of dollars to pay some tax on those gains. And that we should feel sorry for them because of it.

Who exactly do you think should pay higher tax rates to subsidise these property owners because you think it’s unfair? Average workers? Income earners?

You’ll also note that the government hasn’t announced rating factors for future years, so the future increases you are already complaining about haven’t even been announced yet. As the article tells you, average increases this year are under 4%. They’ve also increased the AUV calculation over a linger timeframe from now.

Hi Acton, I will respond to your points. The main problem here lies with your assumptions.

Yes, rates are on a 5-year rolling average of land value, although you seem to forget this fact for all points after your first. The rolling average is why UV can go up 50% but the AUV only 10% (UV and AUV being different things). Further, if I calculate rates for an exact same AUV for 2021 and 2022 I find the total rates payable has fallen nearly 6%. When you combine rolling average and reduction in percentage you can see why the table published above can show a 50% immediate increase in UV but only a 2% corresponding rates increase in the coming year.

Over the course of five years you expect the variable proportion (marginal beyond the fixed $830) to rise somewhere of the order of 50%, or less owing to variations in rating (as occurs and is described above). If I take an example AUV of $500,000 then in 2021 rates would be $3399. Assume that property has risen 50% to $750,000 UV (not AUV) then in five years (when AUV matches) the total rates would be $4821. This rise of 42%, costs you only $1422 spread across a year, less in the intervening years (work out your real case rather than my example using the calculator found on this page: https://www.revenue.act.gov.au/rates?result_1060955_result_page=2 )

Meanwhile, you made a quarter of a million dollars in untaxed capital gains on your home, not including any building value rise owing to building costs. This is hardship? Laughing all the way to the bank?

The people entitled to describe this as inequitable and wrong will be the people who do not own a home. If you cannot afford the rise, join them.
Alternatively, I offer to pay your “extortionate” marginal rates increase for the next five years if you contract to pay me your marginal increase in AUV after that time. Money at 0.5%/year, can’t beat it.

just ignore them both, they are in a league of their own

I noticed they have been going at you since 2020 (I am new here but I am fast learner). They claim to be home-owners with a conscience, I very much doubt it. More likely they are paid by the CM or the ACT revenue under a special fund (fully funded by the rates increase or some other ACT Revenue Ponzi scheme) to stir the waters & distract from the real issues. As I said before just ignore them. Both you & many others have stated their position & presented the facts. Their persistent on calling us asset rich wealthy/greedy/non caring home owners that need to sell their home, reverse mortgage or use any other communist social era scheme is now beyond annoying. Ignore & Avoid entering any conversation with them. They will soon enough give up, as all they seek is attention.

AllSorted,
Seeing as you’re apparently new, you clearly haven’t read my regular complaints about how woeful our local ACT Government is. If I worked for them, I’m doing a spectacularly bad job.

And yes, despite your attempt to pigeonhole, I own property in the ACT, my own UV going up this year by the same high percentage amounts.

I know it might be difficult for you to understand people who’s instant thoughts aren’t how something affects them personally but there it is.

My property is now worth over 50% more than it did 4 years ago. Apparently you think having to pay some tax on that windfall benefit is unfair. I don’t.

“As I said before just ignore them. Both you & many others have stated their position & presented the facts”

Except people like Acton and yourself produce no facts of substance. And you repeatedly ignore logical questions that you know out your position as untenable.

If you actually took a step back and thought how the government functions and the limited taxation base they can draw from, you might realise how taxing property with broad based land taxes is far more efficient and fair than increasing stamp duties or levying taxes in other areas on people with far less wealth than ACT property owners. You want someone, anyone else to have to pay more tax so you don’t have to contribute.

If your actual argument was that the ACT Government is taxing too highly overall, I would agree with you, but it doesn’t affect the arguments being made here.

“Ignore & Avoid entering any conversation with them”.

Yes, of course this is your approach, it must be very confronting to have your clear cognitive dissonance pulled apart by logical and factual statements that you refuse to answer.

No wonder you’re uncomfortable debating the issue.

All Sorted, just pay your piddling 0.5% tax rate on your hugely profitable capital assets, and stop whinging as if you were some sort of victim.
Unless your financial management is as hopeless as your arguments, you have the resources.

My own UV rose significantly. It is no problem, I know what I am doing, so it just means I am a wealthier progressive.

I generally avoid disclosing anything about myself but I think this is somewhat material given All Sorted’s attempted pigeon-holing:
I am not and have never been a member of any political party nor worked on behalf of any party in any capacity whether voluntary or paid. Nor have I voted uniformly (one or other “side”) at any level of government. Attempts to link me to any party or organised campaign are facile. Get used to the fact that, insofar as I comment on Riotact, I am usually a progressive critic. I have other lives.

I also haven’t a clue who Chewy14 really is, by the way. You will see that we tend to disagree when we step away from economic issues.

Fact 1 – most people prefer not to pay more taxes than necessary. Fact 2 – you seem to be able to & want to pay more taxes. Feel free to do so – perhaps make a charitable donation or whatever, but please stop insisting that everyone else must do so. You do not need to keep piggy bugging on everyone else’s post just because they have a different opinion than you. Not everyone is in the same circumstances or mind of thought as you, at least accept that & move on.

Fact 1. No one has argued against this.

Fact 2. No one has said anything remotely like this. Personally, I’d like to pay as little tax as possible because the government doesn’t spend my money very well at all.

But yes, you do apparently have a different opinion on this issue. What the issue seems to be is that you don’t like being called out on the logical flaws in that opinion.

You think that people who have made hundreds of thousands of dollars in windfall capital gains in the last few years shouldn’t have to pay more tax. That rather, other, poorer people should pay more tax so that you don’t have to pay anything.

I disagree.

And apparently you don’t see your property as an investment yet won’t accept the obvious solution to your “problem” of selling and realising those huge gains, or using some of the asset value that you claim not to care about to cover your rates bill. Reverse mortgages are freely available, the government has loans schemes available to assist in these circumstances.

So clearly you do think of your property as an asset and are happy to benefit from the massive increases in value, you just don’t want to admit it. And you most definitely don’t want to pay any tax on it.

Every time someone impacted & has a legit reason to raise a concern about the increased UV/UAV/Rates this chap (I will not point fingers – we all know who it is) keeps dissecting posts & argues for increased rates. Must really have a grunge against home-owners, or be unhappy with life or where he lives or works for the ACT Revenue office, or perhaps a hard Labour & Communist principles fan? At least on Facebook we can block such persistent noids (oh no I am right everyone else must be wrong).

I agree with you. The link I posted shows 40-50 even 60% rises in Average Unimproved Value across Canberra suburbs. As rates are linked by a formula to AUV this means rates must also rise by 40-50-60%. Any tax that increases by that much is inequitable and extortionate. Rate rises will also flow through to rent rises. How can Canberrans tolerate this?

“squawking parasitic sycophants”, “fools”, “irritating toadies”
Oh, the good old days, eh, Acton? I remember primary school too, when you could argue by personal abuse and no-one expected you to understand much arithmetic let alone an economic concept.
Still, to help I have tried to locate those people you mention but am having some trouble. Was it John Henry and his supporting team of experts who wrote the Future Tax System Review in 2010? Is it the NSW government which is starting to replace stamp duty from this year? South Australian State Tax Review? Seven of eight States or Territories which already use Land Tax on rental property? The field is so wide.

Let’s move on to an easier problem. Your UV has probably risen at about 8%/year on average over the last five years. I have seen similar rates of rise in the longer term, even in then outer suburbs. Are you getting 8%+ in a bank account, which would be taxable as income at your marginal rate? Yet, you complain like crazy at being taxed on imputed rents of your real capital asset, stable against inflation.
Non home-owners will weep for you.

Let’s get back to facts. Which of these facts do you dispute?
1. Rates in the ACT are linked to Unimproved Average Value of land.
2. From 2021 UAVs have risen across Canberra suburbs by 40-50-60%. Verified from the link I posted.
3. For properties where UAvs go up by 40-50-60% then rates can also be expected to rise.
4. Rate rises of this magnitude will cause great hardship to many households.
5. Rate rises/land tax rises will
My opinion, based on these fact, is that this is extortionate, inequitable and wrong. You have an opposite opinion, which I neither understand or agree with.

Do you dispute that 40-50-60% rises in UAVs will flow through to significant if not the same % rises in rates?
Do you think that a 40-50-60% rise in rates

HiddenDragon8:48 pm 22 Jul 22

In the ten years since the Frankenstein (or maybe that should be Frank-n-Furter) monster of rates-stamp duty “reform” was unleashed on the ACT, total (i.e. commercial and residential combined) revenue from rates has increased from $209m. to $674m. and total revenue from property stamp duties has increased from $268m. to $396m.

So for all the huffing and puffing about the evils of stamp duty, and the spin from Barr about the “heavy lifting” of taxation “reform” having been done, the ACT government is now collecting more in real terms, and nearly half as much again in nominal terms, from property stamp duty as it was ten years ago.

On those figures, the promise of complete abolition of stamp duty would require already high rates to rise by nearly 60% – which would be in addition to the annual “uplift” factor, which is typically above CPI and above the income increases which many receive. This is not just going to hit the stereotype asset rich/income poor oldies that some here seem to be obsessed by – it will be very painful, amongst others, for mortgagees of all ages whose low fixed rate loans will be going through the roof over the next year, or two.

We know that rate rises are linked to AUV rises. The ACT govt has just announced AUV rises of up to 60% across many suburbs.
https://www.accesscanberra.act.gov.au/s/public-registers/unimproved-values?registerid=m0I4a00000000CgEAI
Rises in AUVs will increase rates/land taxes which get passed on to renters. So property owners, mortgagees and renters will be impacted.

And please keep in mind, Rates were never meant to be an Income or Wealth tax – those that keep it is have been brainwashed beyond help to both believe & accept it as such – there are plenty other taxes that target wealth & ability to pay higher taxes based on income (rates should be neither). Unfortunately the ACT Revenue is a Taxation Office with unlimited powers to tax when it comes to rates & based on the current model that rates are calculated. Some believe it is a fair system – their choice to do so. I don’t think, I know it is not.

All Sorted wrote: “keep in mind, Rates were never meant to be an Income or Wealth tax”
Quite correct, so nobody is brainwashed on that, just uninformed in your case. It is a resource rent on finite capital assets having multiple potential uses. Having trouble with all of that? I notice in your

All Sorted wrote: “I don’t think”.
Oh. Well, you probably do think but lack necessary knowledge or willingness to consider it. I notice in your second post (“…do not dissect…”) you declare you have already plugged your ears.

The method of calculating the rates in the ACT (average UV over a number of years % a percentage + Other Fixed levies) cannot constantly be used to justify the constant increases. It is a faulty method as the variables are controlled by those that have devised that method & at least one of the variables (yes I am talking Undeveloped Land Value = UV) is subject to sudden increases. This method is faulty & only serves well the ACT Revenue office as they can increase rates any time they like by re-evaluating the UV (and call it fair). They also control the UV by not realising enough land and keep pushing the valuations up. As I keep saying rates are not the only source of revenue to the ACT but it is the only one that can suffer sudden increases (and exploited to that effect). All attempts to describe it as fair are doomed. Nothing to do with paying or not paying stamp duty (nobody wants that either). Post your opinion if you must – do not dissect my valid arguments in a pointless attempt to discredit the stated facts. The truth is out there (in my recent UV valuation) just read it carefully. Do not be fooled by the fact that 5 year averaging (AUV) makes the increase this year look small, it will pile up year after year. I will pay what is fair, not what is artificially inflated. Talking specifics a 10% UV increase last year & a 33% UV increase this year (compounded to 47% over 2 years) is extreme to say the least. Trying to justify that by the manipulated impression of gains in wealth does not sell to me. Anyone for Bitcoin (not me)?

I agree with you. The link I posted shows 40-50 even 60% rises in Average Unimproved Value across Canberra suburbs. As rates are linked by a formula to AUV this means rates must also rise by 40-50-60%. Any tax that increases by that much is inequitable and extortionate. The greatest fools are the two irritating toadies who continue to justify and advocate for it.

It’s too funny to hear people complain about recent rate rises and increased UVs when the median property price in the ACT has increasesd by 50%+ in the last 4 years.

Oh, the heart truly must bleed for people owning inner city property who have been made millionaires by windfall gains.

However are they going to survive. People who don’t own property are so much better off and should pay more tax to subsidise these unfortunate home owners.

I mean it’s not like they could just choose not to pay those rates by taking those windfall gains and selling.

Or by unlocking some of those gains by obtaining a reverse mortgage on their property if they are intent on staying put.

Apparently they think their increased asset wealth isn’t “real” but they most definitely still want to benefit from it.

This article fails to expose the true rate rises to come.
Rates are based on the Average Unimproved Value of your block. Enormous increases in AUVs across Canberra have just been made, by 40%-50%-60%, over just one year from 2021.
How can a 1 year 60% rise in UAV be justified? These UAV increases will flow through to extortionate rate rises in future, far in excess of wage, price and property growth.
Select your suburb and any address to see the UV rises for your place, your neighbours and across all suburbs (2022 value/2021 value = % rise):

https://www.accesscanberra.act.gov.au/s/public-registers/unimproved-values?registerid=m0I4a00000000CgEAI

Acton,
How can UV increases be justified?

Because the values of property in Canberra that they are based on have boomed in the last few years obviously.

Maybe you haven’t been paying attention to what has happened in the property market, but homeowners (like me) have done extremely well in the last few years.

UCV does not rise uniformly. Check your UCV five years ago then calculate the compound annual growth. It is high, but not absurd, in fact the same as I have seen longer term in property in the past.

I noted report yesterday that the OECD named Australia and UK as two countries where tax distortions have inflated property assets at the expense of new buyers.

You really should try to curtail your habitual rudeness when commenting. You should also reflect upon differences of opinion and try to move beyond misrepresentation, avoidance and personal attacks as standard tactics. And how is your debate on gender in the construction sector going? Got trounced on that one by P didn’t you.

Acton,
If that was meant as a reply to me I have no idea what you’re on about.

I’ve literally given you a factual answer to your question.

If you actually want to get personal, you clearly don’t like being called out on your consistently false statements and then get your back up because of it. You want to freely spread misinformation without response. Sorry.

This isn’t a matter of differing opinions, the reason why UVs have increased so dramatically is because so have the property prices on which they are based. The calculation methodology hasn’t changed.

If you wanted to see a “trouncing”, there is is.

Answer the question. How can a 1 year 60% rise in AUV be justified? It can’t, unless one is an ideologically blinkered socialist who cannot comprehend that rates are a tax paid out of income, not property value and as rates rise disposable income falls. Rates, based on AUVs that rise by 40-60%, must also rise by 40-60%. These increases are evidenced by the link provided. Has your income risen by 40-60%? Exorbitant increases in AUV/rates are unfair, inequitable, and regressive leading to those on modest incomes, already struggling with cost of living increases, (think pensioners, young families, single income households, mortgagees) living off less, a fall in their standard of living and possibly being forced out of their homes. It is not their fault their own land value has been pushed up by cashed up property buyers of surrounding properties. Nor are they any wealthier in income.
Unfortunately the ACT Government has a cheer squad of squawking parasitic sycophants, enriching themselves at our expense.

Acton,
The question has been answered.

Rates are a tax on land value, which means that if the value of a property increases significantly, so do rates.

You seem to be complaining that it’s unfair to tax people who’ve become objectively rich based on windfall gains from property price increases.

Again you deliberately misinterpret and misrepresent me in an effort to hide the weakness and errors of your own position. You have been called out on this before and not just by me. To make it clear, again, UAV rises flow through to rate rises and rate rises of the magnitude we have been subjected to are wrong for the reasons I have explained.

Incidental Tourist11:33 am 21 Jul 22

Unfortunately less-fortunate renters will be hit twice through both rates and land tax increases. This will happen as a combination of passing on costs to rents and via the diminishing rental supply as investing in ACT becomes less attractive every year.

Those in power should not regard ACT as the utopian “City of the Sun” built for wealthy individuals whose priority is choosing the colour of electric car worth more than an annual salary of many other less successful inhabitants.

Loud promises of “home to just everyone” without taking up a mortgage resonate in many less fortunate renters who want to believe in just every fairy-tale in their desperation while paying rents through their nose living from one pay to another. Unfortunately while the drums and fanfares of such populism are banging loud it results in nothing more than ever decreasing supply of affordable rentals.

Relying on a limited charitable supply of affordable rentals is more window dressing than a sustainable solution. Charities do not, never did, and never will supply above a tiny fraction of one percent of all rentals. Charitable “solution” to a rental crisis built in the ACT housing policy highlights its intrinsic problem rather than shows the way out.

ACT Government cannot stick to the same housing policy which created the housing crisis expecting different outcome. Whether ACT Government likes it or not, the reality is that small investors will keep supplying the lion share of all rentals for the foreseeable future.

While reverting excessive tax burden on rental properties and relaxing tenancy legislation requires political will, it is badly needed as the cost of living skyrockets. Therefore a friendly policy to private investors is the only realistic solution to the rental crisis.

So according to some taxation & financial experts here (that I never heard of before), it is fair that someone living in a modest single story house on a 500sqm parcel pays much higher rates than someone next door on a 250sqm parcel with a 3 storey luxury house built on it ? Don’t they both receive the same services ? Oh right the 500sqm should be subdivided, single house knocked down and replaced with 2 duplexes or an apartment complex. Yeah that is what developers and prospectors do, not genuine homeowners that love their family home & is theirs to enjoy do what they want with it (not what others tell them). Nobody should have to worry if they can afford to pay the rates in 5 years time or have to sell and move. That was never the Australian Dream (not sky rocketing house prices
or UVs anyway). But yes we live in times of greed & profit 1st. And yes there is still plenty of empty land in the ACT and everywhere in Australia, so it is not in short supply as to justify the artificially inflated UV land values. I do not spend my time looking at my next home price update on Domain, I worry about the bills that have to pay now – Income Tax, GST on everything, food prices, petrol hikes, utility bills, medical bills & all the rest (oh yeah & ACT rates). I believe this article was on ACT Rates, not on how to strike it rich on the property market or whatever else.

You keep mentioning the level of services provided when that isn’t what rates are solely for as previously explained. It is a tax.

UV is based on the best use of the land, the fact that someone has a small rundown house on a large block is irrelevant. We want to encourage people to make the best and most efficient use of their land, which is exactly what this form of rates/land tax does. We do not want people running down their properties and land hoarding so as to lower tax bills which is what previous/other tax regimes do.

“Nobody should have to worry if they can afford to pay the rates in 5 years time or have to sell and move. That was never the Australian Dream (not sky rocketing house prices”

Nobody should be homeless either.

Young people shouldn’t be forced to live ever further from services and employment centres because older people want to hoard expensive inner city land and not pay tax.

Workers shouldn’t have to pay ever higher income taxes so that asset rich people don’t have to pay anything either.

Homeowners shouldn’t be discouraged from moving house because of the hurdle of costs that come through transaction based taxes.

That isn’t part of the “Australian Dream”.

“ according to some … it is fair that someone living in a modest single story house on a 500sqm parcel pays much higher rates than someone next door on a 250sqm parcel with a 3 storey luxury house built on it ?”

Yes.

Chewy detailed the rest.

That is your answer for everything – push older people aside & make room for the younger generation (who do you think pays most of the taxes that support people like you). I only bought my first home in 2013. It did not come cheap & did pay stamp duty. So don’t try to teach me what is right & what is wrong boy (go suck a lollypop instead of patronising & bullying the older generation). Why don’t you take it up with successive governments that keep pushing up property prices and made it unaffordable for everyone? Even better why don’t you ask your mamma to move to a nursing home so you can move in.

Wells yours & his opinions appears to be strongly enamoured with the current ACT Labour government & policies. I am neutral to politics but I do care about what hurts my budget. Some of us know exactly what the ACT rates reform means = ever increasing rates for the life of a home-owner. Talk again in 10 years time when everyone realises what they got in return for not paying a rather small, in comparison to the long term ever increasing payments, upfront stamp duty. And when by then UVs as well as real home house prices quadruple what good is not paying stamp duty is going to do to 1st home buyers. Short term gain (for some) for long term pain (for all) is what you are essentially getting by supporting the ACT rates reform. Do the math.

“That is your answer for everything – push older people aside & make room for the younger generation”

Not remotely. My answer is actually more that you shouldn’t get out of paying taxation simply because you’re old which seems to be your answer.

“who do you think pays most of the taxes that support people like you”

Seeing as I pay significantly more tax than the vast majority of people and receive no welfare payments, I’m wondering who exactly does support me?

I also bought property at a similar time to you and paid a big whack of stamp duty. Perhaps I should be whinging too. However, seeing as the government announced their policy direction before you (or I) claim to have bought a house, why are you blaming the government when they’d already announced exactly what they were going to do?

Strange.

With regards to tax, you know who doesn’t pay much tax? Older, asset rich people who’ve progressively advocated to shift the tax burden to average workers so they can avoid paying much of anything in the way of tax.

Glad we agree that they should pay more rather than constantly being subsidised.

“Why don’t you take it up with successive governments that keep pushing up property prices and made it unaffordable for everyone?”

Except the government policies have consistently benefited home owners and investors over others. As you’re a home owner, why are you complaining? I’d be happy if those policies were reversed but clearly you wouldn’t be.

Strange also that you still haven’t answered my question around reverse mortgages nor taken up Phydeaux’s proposition of buying your house for the same value you bought it for and letting you stay.

It’s almost like you do think of your home as an investment.

“Do the math”.

If my UV quadruples, it means the value of an asset I own as a homeowner has also increased enormously.

I’d be celebrating if that happens. It would mean I’m extraordinarily rich.

Soirtemed, how old am I? Which one of us has ever paid more taxes? More stamp duty? The answer is that you haven’t a clue*, and I am not about to tell you because it is immaterial to quality of argument, the thing we can see you lack.
You do like to whinge though, finding self-pity while owning a house where others do not, making ad hominem attacks based on fantasies, avoiding answering any relevant questions.

* a more thoughtful reader might infer some.

Yes, but your Rates (& Land Tax) are based on Unimproved Value of your ACT land. Saying rates are going up by ~3% or ~7% is not telling the whole truth. The UV of my house has increased 55% – $484K to $750K. Family and friends have also had increases in Land Value of 45-55%. Yes we have had a big jump in house prices, but the Bureau of Statistics say this is 28.8% for Canberra over the year to Dec 2021. (UV is determined at 1 Jan 2022). And Building costs have markedly increased so not all the 28.8% rise can be attributed to only land values going up. PLEASE don’t just look at your rates notice, look at your Valuation Notice. If you haven’t received your Valuation Notice yet, google Land Valuations ACT and follow the link to check what your UV is compared to 2021. The ACT Government is hiding these huge land value increases by fiddling with the averaging of rates to land value increasing it to 5 years. And it looks better, so articles like this one can be published. “Rates only increased by 6% etc”. But this the classic tale of the frog in boiling water: in 5 years, using the Government’s own history of increasing UC at least 5% pa, you will be paying more than double the rates you paid in 2021. For me this will mean an increase from ~$3260pa to ~$8095 pa. Don’t know about you, but I know my wages won’t more than double in the next 5 years. With interest rates continuing to climb and inflation running at 6%+, this is a huge negative impact on my budget and just seems to be another hidden stealth tax by the ACT Government.

Exactly, this year most will see a modest increase in payments. The hidden cost that will bite in years to come is the huge spike in UV (temporarily reduced as 5 year AUV & I am not sure if the 3.75% year on increase cap has actually been applied – that info was not provided with the rates notice). I am in full support of paying taxes & fees to support the provision of essential services & pay my fair share. Being a home-owner (anywhere) does not make me an owner of a goldmine (despite what a lot of greedy and no sense people think). Those that keep asking pensioners to sell their family home, downsize or move to a nursing home, go back to your cave (that is where you belong). It is my house not yours, you did not pay for it, you paid no stamp duty either so you have no say on this matter.

“It is my house not yours, you did not pay for it, you paid no stamp duty either so you have no say on this matter”
Well, I paid stamp duty and it was not for your house so you figure it out.

What I find depressingly interesting is your denial of any right of comment to anyone without property. Shades of the mid-19th century.

You can comment, and state your opinions. But most posts here have been personal & selling the philosophy that older home owners are to blame for everything. Being able to buy a home does not make me a member of the lucky & filthy rich generation. I take extreme offense to some of the comments that existing home owners are the problem & have responded accordingly. I understand the frustration of young people that can no longer access affordable housing but homeowners are not the real cause of that problem. The higher rates that you so keenly support is not the answer to that problem. 2 wrongs do not make 1 right.

I did not attack anyone until group of you with started dissecting & attacking my original post & my rights as home owner to both react & protest to ever increasing rates & cost of living. All the point by point smart ass/expert comments brought out the worst of me. That is the only point we agree. So make your own postings to express your opinion, I do not object. Just stop attacking mine. Land Tax, Service Tax, potato, tomato, it’s not what it is called, it’s about it’s impact. When people get personal with me I respond in kind.

What should I do if your opinions are ill-informed and misleading, Soirtemed?

I did not blame older home owners for everything, or anything of itself. I have said basically two things: that a shift from stamp duty to resource taxes was more fair and more efficient; and that ignoring one’s own relative advantage in asset wealth is to advance a self-interested falsehood about total wealth.
You do not need to be amazingly rich to have wealth; it is a continuum, and many others are behind you. Taxation must account for the whole of the continuum.

You have disputed neither point sensibly other than to complain. If that is what “having opinions” means, you are welcome but do not expect respect for them.

Rates are based on value. No where in this article does it state what VALUES are being used to judge these increases over the last 12 months. Just sensationalist figures like a “7% increase in Amaroo!” for instance. That doesn’t mean Barr has increased rates by 7% as this article insinuates, it means that values across the entire Territory have gone up substantially. Those land owners have made windfalls over the last couple years… so of course rates are going to reflect that. How about publishing what the average value difference is between 2021 and 2022, instead of making people hyperventilate on rates dollar amounts alone.

Rate payments (and increases) is a real expense to homeowner budgets. UV value increases are not money in the hand. It is amazing that non home-owners come here to support the increased financial pressure on home-owners (the real impact will reveal itself when the 5 year averaging no longer reduces the AUV & any caps like the mentioned 3.75% per year no longer apply). So this year not so bad, next year and so on, these stealth increases will bite. If you are not a home-owner please do not post here (it does not impact you). My UV has increased by 47% in the past 2 years alone – I have seen no real benefit from that and no service improvements (this is a fact). Happy to contribute & pay my fair share of fees & taxes based on real income. But common forcing pensioners to sell their life-long home to pay rates? What happened to the Australian Dream of affordable home ownership (it went down the drain with high property prices driven by greed – mostly government & realtor/speculator greed)? I am happy for my UV to be fixed, it is meaningless to me, and rates to be increased proportionally to services offered (seriously what does the value of a home have to do with it).

Soirtemed wrote: “amazing that non home-owners come here to support the increased financial pressure on home-owners”.
Which non home-owners are they? You could point them out for admonition, or you could even pull your head out of the sand long enough to notice that, unlike you, they do not own a home! They do not have an appreciating asset, free of capital gains tax and with continuing personal amenity and security, for which you pay a bit in rates.

“I am happy for my UV to be fixed, it is meaningless to me”
Meaningless, yet still you have not taken up my offer to buy your place at original cost, and I shall extend my generosity by promising you first refusal on rental at market rates. No? I wonder why not? Asset value, by any chance?

I recognise from your dollar information that your home is not an extravagant one and that you are retired, yet it still sounds to me like the common self-serving attitude to assets.

Time to sell the house & live in a caravan … travel the country & live rate free … that is the new Australian dream

How else do we pay for raising London Cct for a tram that many of us in Tuggers don’t want which will replace an excellent Rapid electric bus service so that it can take something like double the time to get into the city?

Indeed. But when is anyone going to stop mad Andy and his inflated mates?

The entire concept of calculating rates on fluctuating land valuations (at the mercy of land prospectors) needs to be re-examined. If home owners receive the same level of service (garbage collection, local infrastructure etc.) then the paid fee should be the same. Someone decides to buy an overpriced home for millions around the corner & we pay the price for that? We are taxed in so many other ways based on income & spending, utility usage, road usage etc. etc. The current rates system is outdated & beyond unfair (so I live in a better house because I worked hard & paid my dues all my life – what does that have to do with rates = services provided ?), disproportionate & needs to be re-examined, or at least put some caps on the increases so to limit the impact of changes from one year to another. For the most part, we get a garbage collection each week (most weeks) & it is still a garbage service (all pun indented).

Rates cover far more than garbage collection. It covers education, hospitals, public transport and a whole lot more in the ACT as we have a combined council and state government. It is designed this way so the people living in the best properties with the best land pay more than the people who are living in the worst locations in the smaller houses. They are changing the old system, which penalised people with stamp duty when they upsized or downsized.

Basically you want poor people to pay more and rich people to pay less. A single personb overpaying for a house is not going to drive up your rates. The suburbs going up the most are the ones with the highest incomes. That sounds fair to me.

Rates and Land Tax are resource rents, not a price for garbage collection. If your neighbour raised the house prices (because all your hard work caused that to happen) then you are happy with your increased wealth. Would you be happier if your land value had gone down? Or I could offer to buy it for your original purchase price….

Got to agree Phydeaux,
It ignores the fact that more expensive land parcels that have higher rates do benefit from better government services and amenity due to their locations and local surrounds.

It’s part of the reason why the market values the land more in the first place.

basically the only decent service I get from what you listed is the garbage collection. Obviously you are neither a home owner nor a pensioner most of which may be forced to sell their house as they can no longer afford the rates (how is that fair?).

I cannot feed my family on bricks & mortar. Land valuations is not real money – it is an artificial increase so that ACT Revenue can demand higher rates each year for providing the exact same service. There is another revenue source to the ACT, payroll tax & GST funding that is based on real income & capacity to spend.

We all live in the same city. I lived in my suburb for 10 year & all I have seen is reduced bus services & no improvements.

Soirtemed,
“I cannot feed my family on bricks & mortar. Land valuations is not real money – it is an artificial increase so that ACT Revenue can demand higher rates each year for providing the exact same service”

This is incorrect, the value is very much real and the unimproved land values reflect actual sales from your area in the calculation.

But as I’ve said elsewhere, if you think it isn’t real money or value, you should go to a bank and get a reverse mortgage to cover the rates, which almost any financial institution will provide.

You don’t lose anything because the financial value of your isn’t “real” right?

All your posts here seem to defend the ACT Government and making a lot of assumptions about everything. Do you even own a home & pay taxes? Cause if you did you would understand or at least stop making useless posts here in defence of the ACT government all the time. No I do not want the poor or underprivileged to pay more. I just want a fair go for all homeowners. As I keep saying rates is not the only source of revenue for the ACT government. They get a share of GST, Payroll tax, all sorts of fees for registration & other services, traffic violations, parking fees, land sales to developers etc. etc. & yes stamp duty (still). Rates based on land valuation (that has nothing to do with the property value or how much it will sell) is an easy way for them to attack home owner pockets any time they like by applying arbitrary increases each year. I don’t live in a posh suburb or enjoy the lifestyle of the rich and famous. I am just a home owner. Enough already.

You do realise the UV value does not in any way affect the sale value of a property? Of course you don’t. UV is not tangible wealth to homeowners, juts a revenue raising vehicle for ACT Revenue.

Soirtemed,
I both own a house and pay significant amounts of taxation.

I find it telling that your instant thought is that people selfishly base their position on how it affects themselves. Very much seems like a case of projection.

It’s also telling that you didn’t answer my question. If the value isn’t real to you, why do you not go and get a reverse mortgage to cover the rates cost. It will cost you nothing apparently because the house isn’t an investment.

And you clearly don’t know how UVs are calculated if you believe they don’t reflect real land values and property sales prices. Sales prices in your area are directly included in the calculations to assess land value.

https://www.revenue.act.gov.au/rates/land-valuations

Sometimes is good to accept that if I am not affected just stay quiet. My home is not a commodity, it is not listed on the stock exchange & it is not a goldmine. Maybe that’s the way you see it (you are then part of the problem). Even with shares, you are not taxed on gains until you sell (that is fair). And in case you don’t know (as you so focused on UV gains as real wealth) a long term live in home is exempt from capital gain taxes, so why treat it as fluctuating commodity for rates ? There was nothing wrong with the old system (stamp duty -most of us paid it already) even the ACT Gov admitted that they made less money under the new system – but rates keep going up & up & up. Rates are one of many sources of revenue to the ACT, it should not be treated as a quick fix for all spending deficits.

Soirtemed,

And once again you don’t answer the question. If it isn’t an asset or invesent to you, why won’t you unlock the value that you say you don’t believe exists to cover your rates? Apparently this will cost you nothing right?

Also, many people have called for capital gains taxes to be levied on the primary place of residence. Once again, you should be happy that they aren’t, but it isn’t an argument against land taxes being applied.

And there was plenty wrong with the old system, land taxes are far more efficient and solve problems around procyclical government revenue streams and housing mobility.

Land taxes are far better taxes than stamp duties.

Soirtemed, you possess a real (physical) asset with potential alternate uses. Rents (through taxes) on that finite resource are important else you are extracting value at the expense of others with less than you, or with nothing at all.

You note yourself that you are untaxed on sale, unlike for company investments and other assets. Meanwhile, you are gaining value which you can exploit as Chewy describes, or pass on as inheritance (also untaxed). I note you do not seem keen to take up my offer to buy it at cost, so you admit the gain in value.

Cheer up.

Loinel Mudflap7:48 pm 18 Jul 22

Look at the state of the suburbs and local infrastructure. What I receive for my rates does not match my contributions, nor are my wages keeping up inflation or the incompetent financial decision making of this government.

Hi Loinel Mudflap, if you wouldn’t mind giving us the formula which equates what you should receive with what you contribute, that would be handy for us all.
Thanks.

We just received our 2022/23 valuation, increased by over 33% (+$129K). All driven by a speculative, over-inflated real estate market that can implode anytime. We are live-in home owners (not property investors or speculators) that have to pay increased utility, petrol & food bills in the middle of a pandemic. Can everyone please get a reality check & cap these insane & never ending increases? Our home is not a goldmine for the rate collectors. Enough is enough.

The reason your rates have increased so much is becaise the value of your property has as well. You may not be investors or speculators but you have gained significant financial benefit through owning that property.

If you think it’s unfair, you are free to sell and realise that windfall financial benefit.

my house was never listed on the stock market & I have no intention to sell it as get rich fast commodity. Obviously your value & definition of a home is different. No wonder we are in a mess. Yes I am lucky to have a house, nobody should force me to sell it for any reason (!).

No, despite what you claim your house is an asset that is worth increasing amounts of money that you benefit from.

If you don’t think of a home that way, you can easily avoid having to feel any financial effects of paying your rates by getting a reverse mortgage that covers the cost of rate payments, secured against the value of your home. You won’t have to pay anything back until you die or move.

Remember, you only think of it as a home and not an investment so surely you are onboard right?

Or are you like so many who make up stories because they want to have their cake and eat it too?

It may be an asset to you (and a source of revenue to the ACT Gov) but it is still my home (where I live) to me. Those that are affected have clearly stated their issue here. What exactly is yours & why are you even posting here? Jealousy or dislike of of home owners is not a reason to tax them more or even argue with them for no reason at all (this is exactly what you are doing, just arguing against someone’s legit issue! Great idea re-mortgage my house or sell so I can afford the rates. What the !!!!! ? Surely the ACT Gov can re-mortgage their debt – they definitely have plenty of land to sell (but no that will bring home prices & UV down ?).

“Great idea re-mortgage my house or sell so I can afford the rates. What the !!!!!”

And yet you once again didn’t answer the question.

You claim it isn’t an asset or investment to you, just a home. So why wouldn’t you use some of the value that you claim doesn’t exist to pay your rates?

You could just admit the truth is that you do treat it as an asset and simply don’t want to pay taxes on that asset. You want to have your cake and eat it too.

My issue is that I would like the most efficient tax base possible. And Land Taxes are far superior to stamp duties, allowing more stable government revenue, better housing mobility, more efficient use of land, more intergenerational equity, etc. etc.

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