Land tax threshold freeze to ‘definitely’ push up rents

A move by the NSW government to reap millions in extra revenue by freezing the land tax threshold will flow through and hit renters in the hip ­pocket, property groups have warned

A move by the NSW government to reap millions in extra revenue by freezing the land tax threshold will flow through and hit renters in the hip ­pocket, property groups have warned.

The government expects to make an extra $1.5bn windfall over four years by keeping the land tax threshold steady, but Property Council NSW executive director Katie Stevenson said the move would place upward pressure on rents by capturing more investment properties above the threshold.

“It’s definitely going to put upward pressure on rents,” Ms Stevenson said. “Any increase in costs (for property owners) will be passed on. There’s no more money to go around and that means we pass it on to families that are already doing it tough.”

Australia is already facing a rental crisis. Picture: Chris Pavlich/The Australian

Urban Taskforce acting chief executive Stephen Fenn agreed the decision to lock the threshold would “definitely” flow through to renters.

“Simple economics say if there’s an increased bill, they’re going to pass it on,” he said.

“When you’ve got unlimited demand for housing, of course you’re going to pass it on. People will ultimately feel the impact of this when rents go up.”

The amount the government expects to earn from land tax is expected to grow by 8.7 per cent until 2027-28, adding up to $36b in revenue.

The government expects to make an extra $1.5bn windfall over four years by keeping the land tax threshold steady.

Shadow treasurer Damien Tudehope added on Wednesday “it is naive to suggest that someone who is hit with a new tax isn’t going to seek to recover it”.

Premier Chris Minns argued that 84 per cent of property investors in NSW didn’t pay land tax, adding that Victoria had a much lower land tax threshold yet their rents had grown more slowly than in NSW.

“We’re taking into consideration the heavy amount of debt that was left to the NSW government … and we think we’ve got the balance right,” he said.

Originally published as Land tax threshold freeze to ‘definitely’ push up rents