Melbourne homeowners wage property tax protest

[hwd007]

Melbourne homeowners wage property tax protest

People,

I'm shocked by this proposal. Surely this could send some investors to the wall if applied retrospectively. People that have invested in land, to be hit with $95,000 tax per hectare sold might mean they make a loss on any property deal they make and if they don't sell and can no longer afford to hold the land they could also be financially damaged. Seems draconian to me. I can't see any justifiable basis for such a law to be accepted. It seems unreasonably discriminatory to me. Interested in your views on this.

Homeowners in Melbourne's outer urban fringe have protested against a $95,000 per hectare tax to be payable when they sell their properties.

http://www.abc.net.au/news/stories/2009/05/30/2585297.htm

http://www.optuszoo.com.au/channel/...rne-homeowners-wage-property-tax-protest.html

 

[buzzlightyear]

The legislation has not been passed, so nothing is finalised. The government is consulting the community at the moment. At the same time, freaking the hell out of everyone mind you.

From what I understand, the proposal being presented is if your property is re-zoned, its only once you sell the property, will you become liable for the charge. Presumably at the same time, the property's worth is going to be substantially increased.

The charge is apparently being levied to contribute to local infrastructure that will need to be provided as the land is developed. On the surface, if you are given a windfall profit because of a stroke of a pen, it is not unreasonable for you to also contribute some of these gains to support development which underpins the increase in value.

There are many more twists and turns on this issue to go.

 

[hwd007]

Yea, it certainly needs community consultation. I guess it becomes a question of how much. It could send some people broke, depending on what they initially paid and what it cost them to hold the property over time and what they intend to sell it at and when, etc... I'm not sure I believe this should be retrospective, but if it is to be, I think it needs to take critically pertaining factors into account, that could severely impact on investors livelihood. I have some land and if it ever got rezoned, I could never recover my money as it would never make $95k per hectare.

 

[Rob G.]

You have to hand it to the State Governments for their creativity when it comes to bleeding the taxpayers.

Rezoning immediately increases your rates without any increased service.

Investors suffer higher land tax.

They will take this extra amount out of you multiple times before you sell, then they hit you again.

Then the Federal Government is lining up for CGT, and some of this will flow back to the States.

Usually individuals and businesses scale back unnecessary or discretionary spending during tight times. We don't have access to captive taxpayers to fund our ever expanding ambitions.

Cheers,

Rob

 

[Piston Broke]

This is part of the process of squeezing the small holders in favour of the big ones.
Small holders have no power to fight back.
They rarely make party contributions.
They rarely attend party fund raising events.
They never get any concessions.
The big land holders have probably been bargaining for concessions for a long time at all the fund raising events and back yard BBQs.
These areas have been earmarked for much growth and this will handicap small parcel holders with a ball & chain.
I'm sure if you do some research there're some big players are out there ready to start on big projects.


"PETER SEAMER: All I can say is that if people are buying or selling land in the near future, that they're very careful that they are really - know what their value of the land is and they're not being - selling it for a price that they shouldn't be selling it for."
http://www.abc.net.au/stateline/vic/content/2006/s2571951.htm
As for Peter Seamer, he keeps getting jobs even though he's never ran anything at a profit or on budget nor on time. Now thats a nice club to be in.

Be prepared to wait a long long time for anything to happen.
And if it does, it often gets political. Just because your land is next door
to a parcel that has been rezoned, don't mean your will also be rezoned.
Big Bux, Big Biz, they don't want competition unless it jeopardizes the whole project.

-----
edit:
A quick search and Bingo!!!
http://www.news.com.au/heraldsun/story/0,21985,23668299-661,00.html
"Authority chief executive Peter Seamer said the body's aim was for better and more affordable suburbs."
followed by:
"The recently announced Williams Landing has 2500 blocks, while the Alamanda project at nearby Point Cook boasts 1380."
And there may be a few others around.
Yet this guy wants cheaper prices, but small owners not sell cheap.
So who now owns the "former RAAF" land? Will they be paying the 95K fee?
What concessions will they be getting?
What's the smallest block they can divide?

 

[Belu]

Dont forget increased stamp duty for when you sell it as well.

You have to hand it to the State Governments for their creativity when it comes to bleeding the taxpayers.

Rezoning immediately increases your rates without any increased service.

Investors suffer higher land tax.

They will take this extra amount out of you multiple times before you sell, then they hit you again.

Then the Federal Government is lining up for CGT, and some of this will flow back to the States.

Usually individuals and businesses scale back unnecessary or discretionary spending during tight times. We don't have access to captive taxpayers to fund our ever expanding ambitions.

Cheers,

Rob

 

[THEHEATH]

The charge is apparently being levied to contribute to local infrastructure that will need to be provided as the land is developed. On the surface, if you are given a windfall profit because of a stroke of a pen, it is not unreasonable for you to also contribute some of these gains to support development which underpins the increase in value.

Are you telling me that in a new estate, all the pipe laying, roads etc. are paid for by the government????

 

[NedKelly]

The charge is apparently being levied to contribute to local infrastructure that will need to be provided as the land is developed...........

Sounds great if the local council don't want all their existing subdivision infrastructure fees as well. It seems like they want it twice.

 

[buzzlightyear]

Are you telling me that in a new estate, all the pipe laying, roads etc. are paid for by the government????

No.

I wouldn't know the specifics of the public (Council, state or federal) v private (land owners, developers) split of who funds the costs of new estates.

However, I am assuming there are costs that are being borne the government, State in this case and the increase in value to your property is far greater than so-called tax per site being contemplated. In principle, if you are the clear beneficiary of the re-zoning i.e. your net position is clearly better, why should a tax payer living in the other parts of the State bear the cost, when they do not acquire any of the benefit.

 

[hwd007]

See Also;

Victorian Premier John Brumby has promised to personally review concerns over the impact of a new infrastructure tax in Melbourne's growth corridors.

http://www.abc.net.au/news/stories/2009/05/28/2583015.htm?site=melbourne

 

[hwd007]

Land Infrastructure Tax Concerns

See Also;

Land Infrastructure Tax Concerns

The Brumby government’s haphazard manner in dealing with Melbourne’s ‘urban sprawl forever’ attitude is straining government revenues. The desperate actions following from this with the $95,000 Growth Areas Infrastructure Contribution (GAIC) are the result of the ignorance of more efficient and equitable revenue raising systems. The GAIC has been called a Land Infrastructure Tax.

http://www.prosper.org.au/2009/05/29/land-infrastructure-tax-concerns/

 

[willy008]

Are you telling me that in a new estate, all the pipe laying, roads etc. are paid for by the government????

I was under the impression that the developer did all that and passed the costs onto the new land owners before they sold them the blocks

 

[hwd007]

Yea, interesting point you have there.

 

[PeterP]

Gaic

Although the legislation has not been introduced one of the issues for all property owners is the up front nature of this tax. Development properties are rarely purchased for cash. Normally a deposit is paid and as the development proceeds and funds begin to come in from sales the owners receive the remainder of their money over the lifetime of the development. In some cases that could be 10 years.
The landowners will not have the $95000 per hectare upfront at the beginning to pay the tax.
The other issue is that a lot of land on the edge of the UGB is already owned by large development companies who have been landbanking. Although these big development companies will also have to pay the tax upfront they will be able to recoup the cost when they sell the residential blocks.
Landowners who have managed to hold on to land on the edges of the UGB will not be able to recoup the $95000 per hectare tax. Rates on these properties will also skyrocket once they go inside the UGB and this will put pressure on the landowners to sell and get out. Big development companies will have a huge advantage when negotiating with these landowners and will not be adding the $95000 to the purchase price. Perhaps this is why not much has been heard from the big end of town about this proposed tax.
It is also possible with current legislation that the government will be able to declare any area a growth area whether it is in Mildura, Sale or Camberwell and charge the $95000 per hectare tax. See this link here where this issue was raised in parliament.
http://74.125.153.132/search?q=cache:rTsTwyKF3OUJ:candobetter.org/node/1299+growth+area+infrastructure+fund+vic&cd=6&hl=en&ct=clnk&gl=au&client=firefox-a

 

[buzzlightyear]

Latest news.....

Justin Madden (Vic Planning Minister) just announced on the radio the following, a very quick summary..

Anyone with a PPOR who is on land with 2 hectares or less (previously 0.5 hectare) will not have to pay the infrastructure tax (unless it is subdivided in the future)

You will still have to pay the $95k per hectare for any parcels of land in excess of 2 hectares.

If you have for example 7 hectares of land, sell 5 hectares, you will pay $95k x 5 = $475. The remaining two hectares can be kept free of the $95k charge.

Justin Madden referred to experience in other states where re-zoning has caused a ten-fold increase in value. He didn't give examples however or the time takne for these increased values to be realised.

There will also be an announcement later today on changes to the Melbourne urban growth boundary (draft)

 

[carlau]

The legislation has not been passed, so nothing is finalised. The government is consulting the community at the moment. At the same time, freaking the hell out of everyone mind you.

From what I understand, the proposal being presented is if your property is re-zoned, its only once you sell the property, will you become liable for the charge. Presumably at the same time, the property's worth is going to be substantially increased.

The charge is apparently being levied to contribute to local infrastructure that will need to be provided as the land is developed. On the surface, if you are given a windfall profit because of a stroke of a pen, it is not unreasonable for you to also contribute some of these gains to support development which underpins the increase in value.

There are many more twists and turns on this issue to go.

I was reading that the government are going to back date the land tax to sometime in 2005, so if anyone from 2005 onwards has sold there land they will be hit with this new tax if it passes through. Is this true??

 

[Pablo]

One plus I see in this tax is that there will be fewer developments occurring which will see demand for existing houses increase and thus increase the value of existing properties.

 

[carlau]

Any land owners that have sold or who have entered into a binding contract of sale of there land between 2005 and prior to 2 December 2008 will be free from GAIC.

But I dont know settlement after the 2 December 2008 will trigger GAIC tax.

Read this, goes into great detail.

http://74.125.155.132/search?q=cach...$95,000+per+hectare&cd=20&hl=en&ct=clnk&gl=au