Thursday, 2 May 2019

Western Metropolitan Region

In reply to Dr CUMMING (Western Metropolitan) (21 March 2019)

Mr PALLAS (Werribee—Treasurer, Minister for Economic Development, Minister for Industrial Relations):

Land tax revenue is used by the Government to provide the core services and infrastructure that Victorians rely on. These investments make Victoria a more liveable state.

Land tax assessments increase with the value of land. A taxpayer’s current land tax assessment is based on the 2018 revaluation, covering the period between 1 January 2016 to 1 January 2018. Over this two-year period there was strong price growth in the Victorian property market.

I would like to highlight that land value increases are partially the result of Government investments in infrastructure and improvements in service delivery, making Victoria a more liveable state. Land tax is one way to recover the costs of such investments and services from those who directly benefit from them.

As I do not have information on Mrs Kerry’s aggregate taxable landholdings, I am not able to make comment on the increase in her land tax liability directly. Broadly, the changes in a taxpayer’s land tax liability are dependent on changes in the value of their aggregate landholdings, and the change in land tax bracket(s) that the taxpayer is subject to. Given land values have generally grown throughout the State over the past two years, some taxpayers will see a larger increase in their 2019 land tax assessment. However, any increase in the land tax liability is relatively small when compared to the increase in the value of the underlying asset.

To reduce the bill shock some taxpayers have experienced with two-year valuations, commencing in 2019, the Government is moving to annual valuations. This will ensure that land tax assessments more accurately reflect the value of taxpayers’ property assets. Annual valuations will also ensure that if land values are falling, that is passed on to taxpayers more quickly. This measure will assist taxpayers like Mrs Kerry to better manage the costs associated with their investment properties going forward.

The Victorian Government is conscious of the financial burden of land tax. Taxpayers are able to pay their bill in instalments across a nine-month period from the date of assessment. Taxpayers experiencing financial hardship may contact the State Revenue Office directly to discuss payment options.

I note that Mrs Kerry has also raised concerns over the increase in her council rates. In December 2015, the Government established the Fair Go Rates system which sets rate caps to limit the annual increases in council rates. In this system, councils cannot increase average rates by more than the average rate cap set for them without additional approval. The Fair Go Rates system is encouraging councils to improve accountability and transparency, ensuring they are listening to their communities and delivering the services that matter most.

Thank you for raising your concerns.