Land taxes need cutting

The Real Estate Institute of New South Wales has called on the State Government to further reduce land taxes on residential properties as a means of bringing sorely needed property investors back into the market.

A reduction would be timely as figures just released by the NSW Department of Lands show land values grew an average four percent across Sydney and five percent in regional NSW in the 12 months to July 2007, more than wiping out the 0.1% cut (from 1.7% to 1.6%) in land tax announced in the last Budget.

The shortage of property investors has had a significant effect on Sydney’s rental market, with vacancy rates falling below 1% in the past few months, making it extremely difficult for tenants to find accommodation and pushing up rents for those properties available.

“The token reduction in land tax rates and the land tax threshold that the State Government announced as part of last year’s Budget has failed to attract more investors into the property market,” said Steve Martin, president of the REINSW. “Hitting many property investors with higher taxes does not send the right message to the property investment market and the Government should be thinking about further cuts.

“If the Government was to introduce real, cost-saving incentives for investors it would show that NSW is open for business and stop the flow of investment out of the State.”

“It would also bring welcome relief to those looking to rent and stop the many young people that are leaving NSW because it is difficult to find somewhere to live.”

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