Cuts to land taxes, particularly to top tax rates on investment properties, were among the details of Victoria's State Budget handed down this week.
Treasurer John Brumby announced that the top rate of land tax (on property valued over $2.7 million, that is) will be reduced from 5 per cent to 3.5 per cent, then to 3 per cent from 2006-07.
"We will introduce further land tax relief worth $167 million over the next four years," the Treasurer promised.
Land tax will also be reduced by 20 per cent for the so called "middle-level" property owners - those with investments worth between $900,000 and $2.7 million.
Mr Brumby said that the Government will cap increases in land tax liabilities for a further year, adding that these changes mean that most Victorian businesses with sites valued between $400,000 and $3.4 million will now pay the lowest land tax of any Australian State.
"And - for the first time - we will allow people to appeal their land valuations at the time they receive their land tax assessments," Mr Brumby said.
The Real Estate Institute of Victoria (REIV) welcomed the cuts in land tax in the Victorian State Budget, the cuts to business taxes and the ongoing solid position of the state's financial position; however, it is disappointed that there is no change to stamp duty.
CEO Enzo Raimondo said the REIV had hoped for reductions in land tax and these have been delivered, however the almost 20 per cent increase in stamp duty revenue could have been used to reduce the burden to those trying to buy a home.
"The budget will assist commercial and industrial investors and owners by reducing their land tax burden. It's good to make business more competitive but some relief should also be given to make housing more affordable," Mr Raimondo said.
"Victorian families are paying too much in taxes when they buy a house to live in and this budget proves it. Those buying a home are funding the entire $317M surplus."
Mr Raimondo noted that the budget offered no reform from stamp duty, nor any commitment to extend the $3000 First Home Owners Bonus past 30 June 2007.
