Have you paid enough tax on your property?

If you were asked whether you have paid enough tax on your property, you will think you have! However, the NSW government wants you to pay more tax!

Every household in Sydney could be hit with a new tax to pay for future housing developments under a government shake-up of planning laws. A review of the rules has suggested that residential rates on all properties should rise to boost levies and spread the costs of urban development. The state government’s Green Paper based on the review, which was released on Friday (13/07/2012), does not rule out the new tax but supports new avenues for a ”fairer, simplified and more affordable system for infrastructure contributions”.

The review, The Way Ahead for Planning in NSW, was conducted on behalf of the government and recommends the principle of everyone pays. It advocates the biggest overhaul of state planning laws in decades and has been welcomed by the state’s leading business organisation, the NSW Business Chamber.

“Land use is a key economic lever and having the right settings in place will mean that NSW is better able to attract investment, deliver infrastructure and generate jobs,” the chamber’s chief executive, Stephen Cartwright, said.

The chief executive of the developer lobby group, the Urban Development Institute of Australia, Stephen Albin, has said the present system of funding infrastructure is unworkable and a major barrier to new housing projects. At present, developers have to underwrite the cost of infrastructure in their own developments. The contribution is capped at $30,000 a house.

The authors of The Way Ahead, Tim Moore and Ron Dyer, both former state ministers, say a new tax is the only way to fund the significant gap between the amount that could be charged to developers without damaging the cost of housing affordability, particularly for first home buyers in greenfield estates, and the cost of the necessary local infrastructure required for the new areas.

”We propose that the settled areas of our community that have had the benefit, in the past, of their infrastructure being funded through general revenue streams rather than by specific development charges should bear part of the cost for new local infrastructure,” they say in the report.

Otherwise, they warn, there will be a significant cost blowout in the price of new homes and affordability if the full costs are to be charged solely as developer contributions, which could lead to delays in some developments and social disadvantage in some communities.

One Reply to “Have you paid enough tax on your property?”

  1. I think property management firm handle the day-to-day rental affairs and an accountant to help you understand the tax ramifications of investing. The more support you have, the better you will be able to handle the problems that come your way. so its not the big issue.

    By the way thanks for such a helpful post !

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