NSW Hikes Land Tax – Idiots!

So the news is all bad for NSW property - well particularly for the more expensive property say $1.8million and over. Just as the upper end of the NSW property market is collapsing as investors homes are impacted by the share market meltdown, the state government provides another incentive for investors to look to another state rather than invest in NSW.

Neville Rees, NSW Premier has just announced an an increase in land tax which will affect wealthy land-overs who own investment property worth more than $1.8 million. For those lucky people the land tax will rise from 1.5% to 2.0%. For the rest of "normal investors" will remain paying 1.6% land tax. Unless of course your investment property is worth less than $368,000 - which probably means that its out the Back of Bourke or even in Broken Hill and you will have your own special problems (like finding a tenant).

Given that the NSW routinely wins the wooden spoon for any award for "Good Government" or "Fair and Transparent Property Tax Regime" this latest outrage is really what we have come to expect from the idiots in charge of what used to Australia's powerhouse economy.

To get a feel for just how broad this tax will be, consider that land values along the coast. Land values at Wategos, near Byron Bay, range from $4.5 million to $11 million. Building blocks at nearby Kingscliff average $1.9 million.

Sydney Harbour Properties

The also include commercial property. In the Sydney CBD the land value of a single shop is typically $3.8 million.

According to the Sydney Morning Herald:

"The Premier, Nathan Rees, made the decision to target well-off investors after the cabinet budget committee had discussed whether stamp duties or motor vehicle insurance charges should be raised. It is understood that Mr Rees insisted that families not be hit by tax increases."

Of course the problem is that on top of the current economic crises the NSW government has seen revenue from stamp duty - payable on property such as homes and cars be in deficit of 656 million for the first quarter alone.

Meanwhile the bad news continued for the NSW economy. Unemployment is at its highest in 8 years at 5.2% well above the Australian national figure of 4.3%. We would tend to agree with this further quote from the Herald:

The chief executive of the NSW Business Chamber, Kevin MacDonald, warned before Tuesday's mini-budget that the unemployment figures showed the economy was in need of a "kickstart" and it was "not the time to be hiking taxes".

Photo Credit: Australia News