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Land Tax - Effect on Rental Properties


Cassy O'Connor MP

Cassy O'Connor MP  -  Tuesday, 1 March 2022

Tags: Housing Crisis, Treasury

Ms O'CONNOR question to TREASURER, Mr GUTWEIN

Over the past two days you have announced a stadium with a retractable roof, and a massive cut to land tax. You have claimed this 'gift' to investors will bring down rents. In the last year, following your last round of land tax cuts, rents have increased by 9 per cent in the south, 10 per cent in the north-west and 15 per cent in the north. According to Core Logic, rents in Hobart are now more expensive than Brisbane, Perth, Melbourne and Adelaide.

According to SGS Economics & Planning's most recent rental affordability index, Greater Hobart continues to be the least affordable capital city and the only capital where the average rental household will be considered in rental stress, paying over 30 per cent of their total income. It said:

Since 2016, the median rental rate in Hobart has grown by 50 per cent consistent across dwelling sites. It is now higher than the Melbourne median at any point in the past despite the average rental household income in Tasmania being 33 per cent lower.

How will your land tax gift to people wealthy enough to buy a second, third or fourth property bring down rents?

 

ANSWER

Mr Speaker, I thank the member for Clark for her question. I ask, rhetorically, if she is suggesting that we should increase taxes in some vain attempt to increase housing? It appears the position the Leader of the Greens is taking is that we should not be reducing taxes, especially land tax which is one of the building blocks of rent, and what we should be doing is either holding it at its current level or potentially increasing it.

I know that you lot are a high-taxing outfit. You have never been frightened to tax anything that moves. To be serious, I did not think that the Leader of the Greens would oppose that. It seems nonsensical. You are clutching at straws and playing politics because you know that land tax is one of the base building blocks. We want to reduce it to put some downward pressure on rents over time.

If I was increasing land tax they would be saying it would be putting upward pressure on rents. I am not certain where the Leader of the Greens is coming from. This afternoon, we will be announcing a $1.5 billion program that is going to build more houses. It is going to make it easier for people to make their first step on the property ladder. We are going to lay out a long-term plan to ensure that the challenge we face, which is that our economy is strong and people want to live here, is turned into an opportunity.