Private Members' Statement
Mr ANOULACK CHANTHIVONG (Macquarie Fields) (18:07): — Today I speak on part three of my analysis of the Liberal Treasurer's snake-oil never-ending annual land tax on the family home.
The first part showed how replacing a one-off tax with a never-ending one resulted in higher property prices, further pricing out would-be homebuyers.
The second part showed how the Treasurer's snake-oil never-ending annual tax on the family home can result in weekly rental increases of up to 26 per cent, further denting savings and making it even harder for would-be home owners to enter the property market.
Now let us look at how this snake-oil tax on the family home impacts older Australians.
Older Australians have worked hard for all of their lives to own their own homes, raise their families, build strong roots in their communities and help their kids and grandkids financially where possible.
The proposal for a never-ending annual tax on the family home states that there is an option to defer the payment of their annual land tax temporarily, until their financial circumstances change or there is a change in property ownership.
It may sound like a good deal, but the Treasurer is using political spin on older Australians, indicating that if they move or downsize and opt for his snake-oil never-ending annual land tax on their new family home and do not have the cash flow to pay for it, he then would say, "Don't worry about it. You don't have to pay it. Dom will take care of it. He can defer it for you. No problem at all. Easy does it. How good is this?"
Retired Australians are old and wise enough to know that when something sounds too good to be true, it usually is.
The proposal really says that under the Liberal Party's never-ending annual tax on your family home, your deferred annual tax bill just does not go away but that the Treasurer will take it from your estate when you pass away or when your property has been transacted upon.
So when you are alive, the Liberal Treasurer is silently taking his yearly cut from your most precious asset, a retiree's tax on your family home after having encouraged you to downsize, and when you have passed away, he will tally it up and take a chunk from your estate.
It is a death tax in disguise. It is an attack on people's retirement and inheritance. We are not talking about billionaires here; these are just honest hardworking Australians in the suburbs, who have done the right thing, played by the rules, saved hard and hope to leave something in their wills for their kids and grandkids.
The snake-oil never-ending tax on the family home encourages older Australian to downsize on the basis of some magical financial savings, which actually never eventuate.
The increase in property prices will more than take away any stamp duty relief and all that retired Australians will be left are with only ever-increasing tax bills arriving in their letterboxes every year for the rest of their lives.
A large proportion of middle-class and hardworking retirees will be living on a very tight cash flow. On top of increasing utilities bills, cost-of-living expenditures and those dreadful tolls, the Liberal Treasurer wants to make life even harder for older Australians with an annual tax bill on their most precious asset: their family home.
As an example, a retiree who downsizes to a new two-bedroom home in the suburb of Leppington in south‑western Sydney, where I live, will pay on average $600,000 to $650,000 with an estimated land value of about 60 per cent, which equates to about $400,000.
Under the proposed land tax, a retiree will pay the $500 plus 0.3 per cent of the value of the unimproved land value, equating to a tax bill of about $1,700 per year.
Most Australians would like to retire at 65 and will live well into their eighties given our affluent society and strong healthcare system. That equates to an annual tax bill over at least 20 years of about $34,000.
However, this retiree's tax bill of $34,000 does not take into account any increase in land and property values.
As we have seen, the property market has been running hot and is expected to continue to run hot for many years.
CoreLogic's property data shows that the average annual increase in prices over the past 25 years is 7.6 per cent for houses and 6.3 per cent for units.
I have made a little spreadsheet of my own to show what it would mean for retired Australians.
An increase of 6.8 per cent and living for another 25 years after retirement, because we are a healthy and affluent society, equate to a tax of $86,255 for a retiree.
Some estimates from SQM Research, the NAB and all the other big banks are saying this year that it would be 10 per cent and more.
If the annual increase were 10 per cent, you are talking about $100,277, a tax older Australians cannot afford.