The 2012-13 ACT Budget was handed down on Tue 5.6.2012. The ACT Treasurer Andrew Barr revealed a 20-year plan to reform the Territory’s taxation system. The Budget contains the plan for the first 5 years. Mr Barr said many taxes will be reduced, some will rise, and several will be abolished. Tax measures announced included:
- – the ACT will stamp duty on conveyancing abolished over 20 yearsabolish conveyance duty over a 20-year period. The 2012-13 Budget contains a 5-year plan to progressively reduce the duty, which will commence on Wed 6.6.2012. The tax brackets and reduced tax rates are applicable to both residential and commercial sector transactions;
- existing home buyer concession scheme expanded and reconfigured – the Government will increase the income threshold to access the scheme to $150,000. A full concession will be available for properties valued in the bottom 25% of the market, and increase to $385,000. However, to encourage the construction of new homes, from 30 August 2012, the scheme will be targeted at new homes only;
- all taxes on insurance premiums abolished over 5 years – starting from October 2012, the tax will be reduced by 20% each year;
- payroll tax threshold increased – from 1 July 2012, the payroll tax threshold will rise from $1.5m to $1.75m;
- land tax on commercial properties abolished – Mr Barr said this “revenue source will be rolled into commercial rates, simplifying and streamlining administration for businesses and cutting the time spent on compliance”;
- land tax reduction for low and medium priced properties – Mr Barr announced a cut in the land tax paid by landlords who rent out low-and medium-priced properties. Properties that will see the biggest reduction will be those with land valued at $300,000, he said;
- general rates regime reformed – the ACT Government will introduce a series of progressive marginal tax rates to replace the existing flat valuation-based charge. The fixed charge paid by all Canberra households will remain at $555. The Government will also introduce targeted assistance and concessions.
[FJM Note: The Peter Harvey review of Victorian Taxes recommended a similar replacement of state taxation by increased property rates, about 20 years ago, but it was killed off by the property industry.]
[LTN 107, 5/6]