NT land tax will impact all Territorians: REINT

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Apr 11, 2018

NT land tax will impact all Territorians: REINT

The REINT is "vigorously" lobbying the Northern Territory government to rule out introducing a land tax at the upcoming budget.

Image supplied REINT.

Quentin Kilian, CEO of the REINT.

The Real Estate Institute of Northern Territory is lobbying the Northern Territory government to rule out introducing a land tax, arguing it would have serious negative repercussions for the territory's economy.

“A land tax will impact every Territorian, not just those that own property,” said Quentin Kilian, CEO of the REINT.

"The possibility of a land tax seems to be gathering momentum," he told WILLIAMS MEDIA.

"Public opinion is on our side," said Kilian, saying introducing a land tax would not be popular with voters.

"A land tax will flow through to higher rents because there's no way owners are going to carry the cost," he said.

Commercial tenants and retailers will also be impacted as landlords seek to pass on the tax.

Agricultural businesses would also be affected, as large properties would be taxed, leading to lower profitability, and putting at risk export markets to Asia, says Kilian.

Elderly people on fixed incomes could be impacted, and small businesses too, said Kilian, as land taxes have been proven to impact cash flows and thereby borrowing capacities for businesses.

The government’s white paper on a land tax indicated that if a land tax was introduced, it would be in addition to stamp duty, not instead of it.

"So a person purchasing property in the Territory would be hit twice for taxation," said Kilian.

The imposition of a land tax would be particularly ill-timed at present, said Kilian, considering the weakness in the property market across the Northern Territory, especially in Darwin.

“There is empirical evidence from markets such as New Zealand, that shows a 1 per cent land tax led to a fall in land values of 16.7 per cent” he said.

“The REINT feels that any additional tax measures applied to this fragile property market will have highly detrimental and long term impacts, even to the point that they could increase the population decline," said Kilian.