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A real estate valuer has condemned the continued use of private and social rental housing as a “political football” — calling for an end to the New South Wales state land tax in its current form.
Yarran Investments P/L’s certified real estate valuer, Mike Danzey, has penned a letter to the Premier, requesting a change to the state land tax policy to better encourage social and rental housing.
He has given the example of an Alfred St property in Sydney’s Bronte to argue that an increase in the property’s land tax to more than $45,000 in 2020 means the tax payable by the property’s owners has increased by an amount equal to $100 per week since its last assessment in 2018.
According to the valuer, such a sizeable increase “has virtually collapsed the fiscal viability of the existing use of the property as “exclusively rental residential apartment building” — or ERAB — if the building is privately owned and funded.
Mr Danzey said this is just one of many examples of ERAB that aim to provide secure and affordable housing “being fiscally subverted by SLT”.
It’s just one of the many reasons as to why he has requested a change to the state’s existing SLT policy, as well as a response from Gladys Berejiklian.
According to the valuer, such an overhaul is especially needed in council areas where both the state government and social housing lobbies “are constantly emphasising the existence of a rental housing crisis while remaining silent about SLT”.
“If use as ‘exclusively rental housing’ is effectively removed while politicians and their advisers and social commentators state that ‘a rental housing crisis exists’ in many council areas in the state, how can you and your government remain silent on the impact of SLT in its present form undermining ERAB fiscal viability of those relevant properties?” Mr Danzey queried in the letter.
“It is at best contradictory and, in reality, makes no sense.”
He has argued that a consequence of the continued use of such a tax “undermines the fiscal viability of existing ERAB”, while taxpayers are simultaneously being called upon to fund further taxpayer-subsidised housing.
In Mr Danzey’s opinion, “this is significantly influenced by the concern that the gentrification of many council areas is altering the political allegiances of the residences”.
Within his letter, the real estate valuer has also drawn attention to the anomaly of land tax valuations as they apply to ERAB sites, the fact that residential tenants are unable to claim rental payments as a tax deduction, the restrictions against the use of ERAB property, and the “Machiavellian” design and imposition of such a tax.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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