VICTORIAN businesses are being crippled by enormous increases in land tax that in some cases have rocketed by more than 100 per cent within the past 12 months, according to the Victorian Automobile Chamber of Commerce (VACC).
The chamber says that the recent move by the Victorian government to review land tax annually – instead of being based on a 2018 valuation – is showing early signs of crippling businesses and forcing them to move to cheaper areas outside of major centres.
VACC executive director Geoff Gwilym said that under the Andrews government, land taxes have more than doubled over the past five years – up by 109 per cent.
“In many cases, land tax bills have soared between 50 and 100 per cent in one year,” Mr Gwilym said.
The new land tax system is now the focus of the VACC that is collecting views from the state’s automotive industry in a survey.
The VACC is urging all automotive sectors to respond to this “vital survey”. Responses will be analysed and the VACC will consult with the State Revenue Office’s State Taxes Consultative Council to table the industry’s position on the tax increases directly to the state government.
Mr Gwilym said he recently met with prominent Melbourne dealership groups which voiced their concern and fears surrounding the impact of the new land tax review.
He said land tax was not restricted to franchise new-car, used-car or farm machinery dealers.
“It is those sectors who have voluminous land holdings and facilities particularly in the inner-city precinct,” he said.
“Property taxes not only hurt individuals and families in the community, but they also hurt small businesses.
“This places businesses under enormous pressure, jeopardising the ongoing viability of many longstanding businesses and their employees.”
VACC senior research analyst Steve Bletsos told GoAutoNews Premium that the land tax increase had been sudden and unexpected.
He said it was based on the location and size of the property and could particularly hit inner and near-city Melbourne businesses and force them to outer suburban areas.
“In addition to affecting sales of vehicles, the cost to business of land tax would affect the servicing of customer vehicles that would have to be done in outer areas, making it far less convenient for motorists,” he said.
The land tax hike will affect all landholdings in Victoria. However, heritage buildings – including those occupied by Myer and David Jones in the Melbourne CBD – may escape the huge increases under a peppercorn rating applied to older, historic buildings. The rate can be as low as $1.
The VACC is now urgently seeking to collect information more broadly from members regarding the impact of rising land tax at a business level.
This information will help formulate a response to the Victorian government by VACC with the aim of raising awareness of the immediate and wider repercussions affecting businesses and the community and the need for relief.
By Neil Dowling