Meriton’s swipe at state land taxes

Harry Triguboff has questioned the NSW government over its high land taxes as well as its proposed planning changes.

Harry Triguboff. Picture: James Horan

One of Australia’s richest men, land baron and apartment developer Harry Triguboff, has questioned the NSW government over its high land taxes as well as its proposed planning changes which could potentially add between $250,000 to $300,000 to the cost of developing each unit.

Mr Triguboff has enough zoned land to build 10,000 apartments but says he is being constrained by the bureaucratic process, warning that if the NSW government did not assist with approvals apartment supply would dry up and prices would rise.

In a letter obtained by The Weekend Australian, Mr Triguboff’s Meriton Apartments has questioned NSW Treasurer Dominic Perrottet over land tax, complaining that it is a significant holding cost and represents an average 10 per cent of the gross revenue of his serviced apartments and residential rental units.

“For comparison, this is three to four times higher than in Queensland,” Mr Triguboff said.

“Also, I do not understand why I should pay land tax for holding land which the NSW department of planning refuses to approve.”

Mr Triguboff questioned why land tax was applied to the unimproved land value based on the highest and best use, saying it became irrelevant “if you cannot get the planning approvals to realise the highest and best use”.

“It is for this reason I recommend that there should be land tax concessions or discounts applied to land which cannot get approved due to being unnecessarily held up and frustrated by the planning department, as this is sending some developers broke.”

Meriton was also critical of the NSW government’s proposed 50 per cent land tax discount for build-to-rent developers, saying it would only benefit large corporations along with nstitutional investors and foreign shareholders.

“It will have a negative impact on the existing rental properties held by local developers and investors,” he said.

Meriton owns more than 4500 build-to-rent apartments, 5000 serviced apartments and has sold thousands of units to investors. It questions why the larger companies and their foreign shareholders should get a land tax discount when Meriton has not.

“I do not see why the larger companies and their foreign shareholders, who cannot make build-to-rent work now without your (government) assistance, be given a handout at the expense of the smaller property developers and investors.”

Meriton is also critical of the NSW government’s proposed apartment design changes which it says will significantly increase the cost of developing apartment sites and reduce the number of units which can be built on development land. “This will directly impact apartment prices and affordability,” Mr Triguboff foreshadowed.

“The increased cost to build and reduction to density will directly impact the feasibility of apartment developments and will further impact the housing supply as many developers will not build to lose money and ultimately sell the land at a loss which will see land values drop significantly.”

The proposed planning changes would include changes to ventilation and noise controls, apartment sizes and layout, landscape design and car parking.

“The draft rules are also creating significant planning uncertainty for sites which are currently applying for approvals, as councils are using these draft planning rules in assessing development application approvals even though they are not yet law,” the letter says.