Friday, July 6, 2012

Land taxes creep closer

An interesting report at Gina's Sydney Morning Herald on a proposal  in NSW to fund fire, rescue and emergency services via a levy based on land value. These services are currently funded via a levy/tax on insurance policies.
In a discussion paper released yesterday, the Treasurer, Mike Baird, and the Police and Emergency Services Minister, Mike Gallacher, argue that if the system is to be changed a property-based levy ''would be the best alternative''. The paper seeks public input about how best to overhaul the system, including a new levy on all property owners.
It says an annual levy of up to $267 would have to be imposed on land valued at $250,000, based on applying an ''ad valorem'' rate of $1.07 per $1000 of land value.
As noted at the SMH the abolition of insurance taxes was recommended by the Henry tax review which also recommended broader land taxes. This was also noted here recently in our post on the Audit Commission Report. The Costello recommendation was for a temporary levy flat levy on all rateable properties to reduce debt, which Loose Change commmented would appear to defy the concept of progressive taxation.Attention was also drawn to a subsequent recommendation to consider broader land taxes.

The NSW proposal would appear to be the introduction of a small broad based land tax which would include such as the principal place of residence excluded from current state land tax base.


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