Land tax in New South Wales generates 4% of the state’s revenue – around $2.4 billion, with the state government estimating annual revenue growth at 4.7% to 2017-18 to nearly $3 billion. Alongside stamp duty, it’s helped balance the state budget, thanks to Sydney’s booming property market and massive growth in investment property. Around 150,000 landholders pay the tax.
Land tax is applied to investment properties, vacant land and holiday homes worth more than $432,000 – your principal place of residence and farmland is excluded – but with a record $5.5 billion worth of new NSW property investment loans being written in November last year, it’s a key source of income for Mike Baird’s government as it embarks on an ambitious infrastructure program.
But the government may have a problem, with the No Land Tax Party looking set to take the final seat up for grabs in the NSW upper house.
The micro party lucked it in when they nabbed the first column on the massive Legislative Council ballot paper at last month’s election. The party was founded by property investors and wants land tax abolished, suggesting the revenue shortfall could be replaced by upping the GST to 15%.
The balance of power in the upper house will be critical for the Baird Government, which was easily returned in the lower house, and will get nine of the 21 seats up for grabs on March 28, giving it a total of 20 seats on the red leather benches. The ALP will pick up seven seats, with two for the Greens and Fred Nile’s Christian Democratic Party (CDP) and Shooters and Fishers Party (SFP) taking one each. The Coalition is in the race for the 21st seat, but No Land Tax is currently ahead.
Previously, Barry O’Farrell cut deals with SFP to get legislation through, resulting in plans to allow recreational shooting in NSW National Parks. Baird looks more likely to deal with the CDP, however, if the No Land Tax Party gets its place at the negotiating table it may still make things difficult for the government.
The party’s representative is Peter Jones, a former ALP member and union official. After the election, the party faced claims that it has failed to pay booth workers it hired for election day.
The count for the NSW Legislative Council is expected to be completed and declared this week, but may still end up being challenged after the Animal Justice Party, which is also in the race for the 21st seat, was left off nearly 20,000 online ballot papers.
Business Insider Emails & Alerts
Site highlights each day to your inbox.