Property is the economy's driver in the ACT Budget

The Chief Minister’s ACT Budget tabled today clearly illustrates the property industry’s critical role in growing Canberra.  Executive Director of the ACT Division of the Property Council Merlin Kong said that the ACT Budget captured both the achievements and the challenges facing the industry.

“The property sector contributes more than half of the Government’s take of taxes, rates, fees and charges to the Territory,” said Mr Kong. “It is the second largest employer in the ACT, with
1 in 9 people directly and indirectly drawing their wages from property.”

“These achievements are shadowed by the challenges our community faces in housing affordability, the handbrake of excessive taxes and charges, and the lack of regulatory and planning integration for effective renewal of our CBD and town centres.”

“The Property Council welcomes the removal of stamp duty for commercial properties valued at less than $1.5m. However, despite this affecting some 70 per cent of property transactions in volume terms, it may represent a smaller proportion of transactions in value terms. This is especially important as commercial conveyance duties collected were a major contributing factor in decreasing the Government’s deficit in this Budget.”

“In light of the continued underperformance of the Lease Variation Charge, it is sobering to note that the Government has made no changes to this charge. The LVC has and will discourage urban renewal in our city, and brings into question the plausibility of the 251% anticipated increase in revenue collected in 2016-17.”

“Likewise, the changes to the land tax system will see investors in apartments hit with a potential four-fold increase in annual taxes.  We are concerned that this will impact high-density housing affordability, which is critical to the Government’s plans for urban infill.”

“With respect to payroll tax, we would have liked to see a more earnest move to increase the threshold to a higher level. We note that the small increase of $150k will benefit only 40 businesses, where in overall terms, more than 90 per cent of payroll tax revenue comes from businesses with payroll liabilities of $10m or more.”

 “The Property Council remains committed to working with all elected officials and is hopeful that the Government partners with the industry to grow our economy.”

Media contact:  Merlin Kong |M 0429 579 972 |P 02 6276 3602 |E mkong@propertycouncil.com.au