Aiming to put downward pressure on rents, the Tasmanian government has announced it will double the tax-free threshold for land tax, from $50,000 to $100,000.
This means property owners will not have to pay land tax on holdings valued under $100,000. Aligned with this, the government will also lift the upper tax threshold to $500,000 and lower the tax rate for land valued between $100,000 and $500,000 from 0.55 per cent to 0.45 per cent to reduce the tax payable.
The move comes on the heels of the state’s adjustments last year to the land tax thresholds, which doubled the value at which land tax becomes payable from $25,000 to $50,000 and increased the top threshold from $350,000 to $400,000.
At the time, the alterations were projected to provide more than $56 million in land tax relief for landlords and property owners over the course of four years. These new changes increase the tax relief to roughly $220 million of tax relief through 2026.
It’s estimated that around 70,000 Tasmanians will save roughly $800 every year on their land tax bill, up to a maximum saving of $1,625. Close to 12,000 taxpayers will no longer need to pay any land tax at all.
The government reports the main aim is to enable further reductions in the costs for rental properties, thereby driving down rental prices.
Tasmanian Premier Peter Gutwein said in a statement that the newest changes were in recognition of the continuing issue of tight rental markets across the state.
“With house prices and rents continuing to rise, we know more needs to be done, and the new arrangements will save Tasmanians hundreds more each year, providing more money to spend in local businesses,” Mr Gutwein said.
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Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.