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April 22, 2024

Land tax unsustainable, says local commercial property owner

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Are land taxes, set by the NSW government, contributing to spiralling inflation?

That’s a question that local landlord and filmmaker, David Warth, is calling on other landlords to discuss at a meeting on land tax reform.

The meeting is planned for next Monday, July 3, at 5.30pm in the ANZAC room, at the Byron Bay Ex-Services Club.

Several aspects of reform are up for consideration says David. ‘Land tax raised locally could, in part, be allocated locally. This could take pressure off the local council rates levy’. 

‘Land tax could be indexed to commercial interest rates with viable rental returns and CPI also being taken into account.

‘This would mean that it’s still worth investing in commercial properties and tenants would have security and the ability to run a successful business’.

Some tenants are very stressed

Most commercial property agents have been contacted personally on the issue, Warth says. ‘From discussions with these agents, there was an understanding that some tenants are very stressed, owing to the economic downturn. Fortunately, there are also some enterprises operating in the sector that have been able to maintain momentum’.

David told The Echo that there is a human side to the downturn being experienced everywhere. ‘I’m thankful to have good relationships with my tenants, and I do my best to rent out my premises at rates that are sustainable. 

‘I have very good tenants and I’m mindful of how important it is for them to succeed with their businesses, and for them to have the opportunity to really enjoy living and working in our beautiful part of the world’.

‘This is a prosperous country and this is a very rich area. There shouldn’t be this amount of stress when renting a property’.

During covid, he says he adjusted the rents accordingly, and brought them back up slowly. 

‘It wasn’t pleasant to see my tenants so distressed at the time. It was terrible, but we got through it. Now due to land tax increases, the pressure is on again.

Not tied to CPI

‘Rents are often indexed to CPI, but land tax is not, and is going up in leaps and bounds.

‘These increases, coupled with rapidly increasing living costs, are directly impacting our community’.

David continues, ‘Land tax was introduced in 1859 in colonial times. In 1906, the NSW government, under Premier JH Curruthers, actually abolished state land tax with the aim of providing local councils with an independent source of revenue. This situation lasted until 1956’. 

‘Land tax has become a very blunt instrument, and is creating real problems in an already inflationary environment. We now need a more sophisticated approach to this tax with built in safeguards.

‘Depending on how the meeting goes, I would like to see a representative or delegation enter into discussion with the state government on land tax reform. I feel this is a matter of urgency’.

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  1. Taxing does not increase inflation, spending does. If they sit on the money, or use it to pay down debt, it would actually be deflationary.


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