Land tax exemption scheme extended indefinitely: ACT government

The ACT government has extended land tax exemptions indefinitely for landlords whose investment properties are managed through a community housing provider in a bid to address rental affordability across the capital.

Landlords signed up to the scheme are exempt from paying land tax if they rent their properties at less than 75 per cent market rates.

The scheme was introduced in 2019, and initially, 100 properties were eligible for the exemption, which was set to end on June 30, this year. The number of properties eligible for the scheme was increased to 125 last year.

The government’s latest announcement upped the number of properties to 250, despite only 54 altruistic landlords who signed up to the scheme.

“Landlords are now being encouraged to sign up to the scheme to increase the number of affordable rental properties in the territory while they reduce their rental property liabilities,” ACT chief minister Andrew Barr said.

“Incentives such as these empower the community to make a real difference to people’s lives … every Canberran, no matter their circumstances, should have access to safe and affordable housing that suits their needs.”

Looking at a fixed land tax rate of $1326 per year, should a landlord lease out their property under the scheme for $300 per week (75 per cent of the $400 market rate), they will save $74.50 per week.

The latest Domain Rent Report for the March quarter of 2021 showed Canberra was still the most expensive city in which to rent a house and unit.

The median asking rent for units hit a record high of $500 per week, while the median asking rent for houses remained at its peak of $600 per week.

“We all know that Canberra is expensive to rent [in] and that there is a lack of affordable housing options, particularly for those on low incomes,” the Minister for Homelessness and Housing Services, Rebecca Vassarotti, said.

“While both the federal and ACT governments have a key role to play in responding to affordability, the land tax exemptions scheme is an opportunity for our community to get involved in a direct, visible, and people-focused approach to the housing crisis.”

Ms Vassarotti said while the land tax exemption scheme would not solve rental affordability in the capital, it is an “important initiative to actively engage home owners who care to help Canberrans in need to access a home”.

“It’s not just a tax incentive; it’s a contribution landlords can be proud of,” she said.

“While the ACT government remains committed to ensuring equitable access to housing for all Canberrans, we need the federal government to step up by investing in much-needed social housing.”

The federal government’s latest budget said it expects to deliver $124.7 million to states and territories over the next two years for social housing and community service workers in the housing and homelessness sectors.