EBBS AND FLOWS: Michael Shay believes that the increase in land rates will not result in cheaper beach houses.
EBBS AND FLOWS: Michael Shay believes that the increase in land rates will not result in cheaper beach houses.

Land tax on second homes sparks revolt

By DAWN COHEN

MESS around with the sacred Aussie fantasy of escaping to the weekend beach shack, and even the pollies rise up in revolt.

For the first time, New Year mail deliveries had land-tax bills for all second home owners, no matter what the value of their property. Previously, second homes worth less than $317,000 did not pay a penny.

A NSW Government mini-budget abolished the threshold last April.

The first land evaluations since the change were completed on December 31 and owners have been receiving the bad news since mid-January.

State Parliament backbenchers are unhappy. And even NSW Premier Bob Carr is acknowledging the anger.

He will not spell out the tax's future, but some commentators believe his admission yesterday of the difficulties signals a change.

While Labor backbenchers are protesting, local real estate agents are not fearing for the beachshack market.

The reform has not affected local sales, said Michael Shay, principal of LJ Hooker Real Estate, Ballina.

"People want to move north and be on the coast. Land tax won't change that," he said.

"It is possible they will consider selling because of the cost of land tax, but that won't bring prices down."

Mr Shay cites the $2.82 million sale of the Dress Circle Drive house in Lennox Head at the end of last year.

"The property had been in the family for three generations," he said.

"Land tax would have been in executors' minds when they decided to sell. But it did not impact on the price."

Rent levels are another matter, according to Peter Savage, principal of Century 21, Ballina.

"Landlords get the tax back by increasing rents for the people who can least afford it," he said.

Michael Gudgeon, sales consultant for Elders, Byron Bay, said the tax put NSW at a disadvantage.

"But buyers come here anyway because it is a fantastic place to be," he said.

Property market statistics bear him out. A recent VIS Shrapnel report stated that there are 3500 new holiday home owners in NSW every year.

"People are aware of the tax, but it hasn't stopped anything," said Cameron George, from Evans Head First National Real Estate.

A spokesperson for treasurer Dr Peter Refshauge said the minibudget land tax reforms must be seen as a whole.

The Government also reduced the levy on premium-value properties and abolished the stamp duty for first-home buyers.

Lismore, Byron Shire and Ballina Shire registered 518 firsthome buyers since last April, sav- ing nearly $4 million.



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