If you have property, you have heard the term “land tax”. And you are obviously aware that there are several factors that come into play when it comes to calculating it. But have you heard of land tax proposals from The Henry Review? It is Australia’s Future Tax System Review that aims to guide tax system reforms for the next 10 to 20 years. Commissioned by the Rudd Government in 2008 and published two years later,
What is The Henry Review?
It is Australia’s Future Tax System Review that aims to guide tax system reforms for the next 10 to 20 years.
In this article, know more about land tax proposals included in The Henry Review. This report covers 138 recommendations which are classified under nine themes:
- Concentrate raising revenues on personal income, business income, private consumption, as well as economic rent from natural resources and land.
- Configure taxes and transfers for productivity, participation, and growth.
- Implement a simplified personal income tax. A tax-free threshold reaching AUD 25,000, two tax brackets, as well as simplified superannuation, deductions, and offsets.
- Establish a fair, adequate, and work supportive transfer system.
- Integrate consumption tax compliance with business systems.
- Establish efficient resource and land taxation.
- Complete the retirement income reform and secure aged care.
- Increase rent assistance, move to a uniform land tax, delete stamp duty, and move to a neutral treatment of rental and owner-occupied housing.
- Establish a more open, understandable, and responsive tax system.
One important proposal that we can focus on is the removal of stamp duty. Since it is an unreliable revenue source, The Henry Review urges states to replace it with land tax on every property. However, the thing about having universal land tax is that it doesn’t take into account an individual’s capability to pay. Also, it greatly affects those who have a lot of assets but with little cash. These include many retirees. The land tax can be a great financial burden, not to mention the interest charged by the ACT on land tax arrears.
Once you know more about land tax proposals in Australia, you’ll find out that solutions won’t come easy. It will entail a lot of research and agreement among states to ensure that solutions that will be made will be beneficial for most people. As an individual, it pays to have a better understanding not only of land tax but other aspects of property ownership.
Do you have other ideas when it comes to land tax in Australia? Share your insights in the comments section.