Property owners vow to make land tax a pre-election headache for government

Premier Peter Gutwein has backed away from his earlier stance last year that no changes would be made to land tax.

• Tasmanian shack owners are reporting feeling the pinch of increases in their land tax payments
• Land tax complaints get short shrift from Tasmanian Premier

PROTEST signs keep popping up in shack towns and parts of Hobart as property owners vow to make land tax a pre-election headache for the government.

Premier Peter Gutwein has backed away from his earlier stance last year that no changes would be made to land tax, saying potential adjustments to the rate and thresholds will be investigated.

Premier Peter Gutwein.

“I’ve asked for Treasury to work on that space and provide me with some options about how we might be able to contemporise our land tax arrangements,” Mr Gutwein said.

“I think our system works very well and I am certainly not considering broadening the land tax base. But in terms of the rate and the thresholds, whether or not they have stood the test of time, I have asked Treasury to consider.”

Multiple-property owners including Rob Rex, who enjoys a million-dollar weekender at Orford, is among those agitating for change after a recent revaluation of properties along the East Coast resulted in some land tax bills doubling or even tripling.

Rob Rex is among a growing number of rental and shack owners who are putting pressure on the state government to overhaul Tasmania's land tax system.

“It is just robbery,” Mr Rex said.

“In general I suppose a lot of the people up here have money but there are people up here who are pensioners and don’t have a lot of money and have perhaps had a place for 40 years. They may have to sell, or get their children to help out.”

When Mr Rex bought a row of six cottages on Davey St in Hobart in 1989 his gross rent was $21,158, rates were $3721 and land tax was $562.

Now, the gross rent is $96,786, rates are $15,821 and his land tax bill is $16,248.

“Rent and rates have gone up five times, but land tax has gone up 28 times,” Mr Rex said.

Retired valuer David Saunders said he was “getting hit for” about $8400 a year in land tax for his humble vertical board shack at Cremorne.

“The intergenerational family shack and way of life are being taxed out of existence,” Mr Saunders said, warning the government that it was sure to be a prominent issue for “fellow Baby Boomers” at election time.

The recently formed Tasmanian Residential Rental Property Owners Association, which wants land tax reduced or abolished altogether, has welcomed Mr Gutwein’s new position.

President Louise Elliot is lobbying for potential changes, including different rates and thresholds for Australian and overseas investors and a reprieve for those owning just two properties.

She said a cap on land tax increases would “minimise bill shock”.

“For example, having a policy that bills will only increase by a maximum of 10 per cent per annum, regardless of the change in valuation,” Ms Elliot said.

The state reaped $125 million in land tax last financial year and $314 million in stamp duty.

Mr Rex argued the government should be able to afford a land tax cut as it was enjoying a stamp duty “bonanza” thanks to increasing property prices and strong sales.

However, economist Saul Eslake, who has called for a broader land tax to replace stamp duty, said with the government running four-year cash deficits of $3.3 billion, it could hardly afford to cut taxes for property owners.

“The kind of review I would like to see is one which looks at comprehensive reform of the whole property tax system, indeed the entire state taxation system, rather than one which just seeks to reduce the tax burden for a relatively small number of people,” Mr Eslake said.