ACT PROPERTY Council of Australia says the Quinlan Review panel’s failure to analyse the impact of the Lease Variation Charge on existing home owners, buyers of redeveloped properties and renters leaves a big gap in the review.

The review analysed the Territory’s tax system in comparison to other jurisdictions, the ACT’s economic structure, the ACT’s socio-demographic composition, expenditure needs and Government policy objectives.

Executive director Catherine Carter said it seemed that the panel was not willing to challenge Government policy on this matter.

“The Property Council has accepted that a properly designed and measured LVC regime can be appropriate. Unfortunately the current LVC regime and the quantum of the tax does falls short of this mark,” she said.

“A serious weakness in the Review is that it fails to challenge the Government’s rhetoric about the LVC being a tax on developers.”

She said another gap in the review was the tax on ratepayers to fund fire and emergency services.

“The tax bears no relationship to risk and is levied on land because land is an easy target. The Property Council will make sure that this inefficient and unfair tax is raised at the roundtable,” she says.

However, she says the Property Council says the review is a starting point for consultation on how to reform the ACT’s taxation system.

“The Property Council agrees with the panel’s view that major own source taxes in the ACT are volatile, unfair and inefficient, and therefore unsustainable in the long-term, and that tax reform must ensure that future generations do not endure reduced levels of service or the higher economic costs of an unfair and inefficient tax system,” Ms Carter said.

“The Government’s agreement in principle to the abolition of duty on conveyances (stamp duty) is a very significant step in the right direction.

“The Review says stamp duty is the most unstable and unpredictable tax. It is fundamentally unfair, in that it raises around a quarter of the total taxation revenue of the Territory from around 9 per cent of the people whose circumstances may impose the necessity to move to different accommodation. For this tax, around 38 cents of the economic value is lost for every dollar raised.

“It is also good to see the Government agreeing to in principle, adopt a broad-based land tax as a base for revenue replacement.

“The Review fails to point out that like stamp duty the ‘tax’ is voluntary; that developers can pay the tax if they want to proceed with a development proposal, but they can also pass it on in the form of higher prices for redeveloped properties or pay less to existing owners of properties due for redevelopment, or choose not to invest in the redevelopment.”

Ms Carter said that the Property Council will participate actively and constructively in the roundtable discussions over the next few months foreshadowed by the Government, and will provide feedback on the Review and possible reforms “moving forward”.