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Land tax revenue must be capped
The Iemma Government should cap land tax revenue as a percentage of the State Budget according to the Real Estate Institute of New South Wales.
REINSW President, Cristine Castle, was commenting in Sydney today on the announcement by the NSW Valuer-General, Philip Western, that residential valuations would rise by an average of 2% in 2006.
Mrs Castle said that the Premier needs to deliver a fairer land tax system to encourage investors to satisfy the ever increasing demand for commercial and residential rental accommodation.
Land tax is a tax levied on the owners of various categories of land excluding taxpayers’ residences, as at midnight on 31 December of each year.
“The Premier should introduce legislation that would require the State Government to reduce the land tax rate if land tax revenues increase as a result of the necessary reforms to the flawed land valuation system, and which result in a cash windfall for the government.
“The necessary legislation would be based on the principal that land tax revenues should not exceed their currents levels.
Mrs Castle said the State Government's on-going reliance on property taxation as a source of revenue creates an extra financial burden to home purchasers and reduces housing affordability.
"On average NSW residents pay more property taxes than residents in any other State and more than 40 percent of State tax revenue is typically gathered from property taxation.
Mrs Castle said that the Iemma government now had an ideal opportunity to alleviate the current high taxing of property investors.
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