BUSINESSES will be eligible for land tax rebates and most Tasmanian shacks will be exempt from the tax under changes announced by Premier David Bartlett yesterday.
The changes, worth $19 million this financial year and $31 million next financial year, include:
Businesses with land values of more than $350,000 will be eligible for rebates this financial year reflecting the new land tax rates.
Land tax benefits to businesses and private investors across the board will be on the component of their land tax value over $350,000.
The rate of land tax on land values of more than $350,000 will be immediately cut from 2 per cent to 1.5 per cent, and those valued at more than $750,000 will be cut from 2.5 per cent to 1.5 per cent.
The new rates will apply from July 1, 2010, but to assist industry in the transition to the new rates, a cap will ensure no eligible business pays an increase greater than 100 per cent this financial year and in 2010-11.
Landlords will be required to pass on land tax savings to their business tenants, with the Government considering legislative measures to ensure this happens.
Shacks with a land value of up to $500,000 from 2010-11 will be exempt from land tax.
From 2010-11, intending first home builders will be given up to two years to complete construction in order to be eligible for a full rebate on the land tax they have paid on their block.
The Government will provide up to $4 million additional funding to the Valuer-General to enable revaluations to occur every two to three years, rather than every six.
From 2010-11, those running a small business from their home will no longer pay land tax on the part of their home used for businesses purposes.
Announcing the package yesterday, Mr Bartlett said his Government had taken its "eye off the ball" in relation to land tax but that it was now acting in response to community anger and to protect jobs.
He said he could guarantee the Government would meet its financial targets despite the cost of the reforms.
"The Government is using the state's stronger-than-expected revenues to provide tax relief to businesses that will employ more Tasmanians and keep our economy strong," he said.
"But we are also using our financial position to look after those Tasmanians saving to build their first home, to family shack owners and to people who run a business from their home."
Last month Mr Bartlett said no changes would be made to land tax until the outcome of the federal taxation review being undertaken by Treasury head Ken Henry was known.
Yesterday he said Mr Henry had been kept informed of the changes.
Changes to the land tax rate and the exemption of shacks and home businesses will require legislation.
2009 LAND TAX THRESHOLD BY STATE
Western Australia: $300,000
Queensland (residential): $599,000
Queensland (commercial): $349,000
South Australia: $110,000