Labor, Greens question claim tax cut will see rents fall

Cuts to land tax will keep rents down, the Premier says – but Labor, the Greens and TasCOSS don’t agree.

OPPOSITION parties have rubbished the government’s claim that a $220m cut to land tax will put downward pressure on rents.

Premier Peter Gutwein’s land tax cuts will form a central part of his State of the State address onto parliament on Tuesday.

“What this tax cut will do is put downward pressure on rents,” he said.

“It’s an acknowledgment that the building blocks of someone’s rent start with land tax and land tax has been rising for the last couple of years.”

But Labor Housing spokeswoman Ella Haddad said the tax cut was a win for landlords because there was no guarantee it would be passed on.

“This is yet another area where if Peter Gutwein was serious about easing the cost of living pressures on Tasmanians he would make sure that those tax cuts flow onto tenants,” she said.

“The land tax cut that Peter Gutwein has announced today will help landlords and property owners but they won’t help people who are renting unless it’s ensured that those tax cuts are passed on.

“That’s the key here. If Peter Gutwein is serious about the Cost of Living pressures that Tasmanians are facing that’s what he’ll do.”

Greens leader Cassy O’Connor was similarly sceptical.

“It is absolutely ridiculous and dishonest to suggest a cut to land tax will lead to lower rents,” she said.

Greens leader Cassy O'Connor speaks to the media on parliament Lawns in Hobart on Monday, February 28, 2022.

“Let’s be clear, the reason that Minister Ferguson is out today talking about six new homes for young homeless people is because the government has announced a big cut to land tax that will benefit the propertied class.

“Those hundreds of millions of dollars that now won’t be being paid into land tax will not be going into increasing the supply of affordable housing. “This government created the housing and homelessness crisis. It has done precisely nothing to really address it.”

State Development, Construction and Housing Minister Michael Ferguson officially opened six new housing units in Glenorchy on Monday as part of what he described as the government’s $615 million investment in social and affordable housing and homelessness.

“That’s more homes for Tasmanians in need and more work for Tasmanians, supporting our local businesses,” he said.

But TasCOSS CEO Ms Adrienne Picone said the Tasmanian Government’s recent boast of delivering a house a day was “woefully inadequate” and would deliver only one-third of what was needed.

“While every house built is a step in the right direction, the fact remains the Government is treading water when it comes to social and affordable housing,” Ms Picone said.

“Changes to land tax will give property investors a lower land tax bill. But where is the inducement to ensure this saving is passed on to renters?”

$220m change set to impact homeowners of Tasmania

TASMANIANS’ land tax bills will be slashed by more than $220m over the next four years, Premier Peter Gutwein will announce on Monday.

The tax-free free threshold for land tax will double to $100,000; the upper threshold will rise to $500,000 and the tax rate for land valued between $100,000 and $500,000 will drop from 0.55 per cent to 0.45 per cent.

Rising property values have boosted the state revenue take from land tax and conveyance duty.

Family homes are exempt from land tax, which is levied on vacant land, commercial properties, rental properties and shacks.

The state government has budgeted to receive $142m in land tax this financial year.

Mr Gutwein said the move was intended to bring down the cost of living.

Houses in Sandy Bay, Hobart. Picture: SAM ROSEWARNE.

“We took action last year to relieve some of the costs of rental properties and put downward pressure on rents by resetting the land tax thresholds, which provided more than $56 million in land tax relief for landlords and property owners over four years,” he said.

“There is no doubt our strong economy and desirable lifestyle has meant more and more people want to live, work and raise a family in Tasmania.

“With house prices and rents continuing to rise, we know more needs to be done, and the new arrangements will save Tasmanians hundreds more each year, providing more money to spend in local businesses.”

The changes mean around 70,000 Tasmanians will save on average approximately $800 every year, up to a maximum saving of $1625 – with close to 12,000 taxpayers no longer needing to pay any land tax at all.

Luxury houses in Roches Beach. Picture: RICHARD JUPE

“When combined with the changes we made last year, it will provide about $220 million of tax relief for property owners over the next four years — to enable further reductions in the costs for rental properties and helping to put downward pressure on rent prices,” Mr Gutwein said.

The land tax announcement will be the start of a busy week for the government, which will begin with the swearing-in of a new Minister on Monday, a new MP — Lara Alexander — on Tuesday, and the Premier’s State of the State Address.

Leader of Government Business Michael Ferguson said the government had a packed agenda.

“There’ll be major initiatives announced across the portfolios, one of which has already been previewed in terms of creating a housing authority with a renewed emphasis on building and supporting people in their housing system here in Tasmania,” he said.

The Climate Change State Action Bill is before the parliament. And incidentally, as we’re here today with this event, we also have the important legislation around a container deposit scheme to be finalised as well.

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