New TAS Homebuilder Grants Act 2020 and Land Tax Amendment Act 2020

Thursday 2 July 2020 @ 9.09 a.m. | Legal Research | Taxation

Recently, two Bills were introduced into the Tasmanian Parliament with the intention of helping stimulate the state’s economy. The Homebuilder Grants Bill 2020 and the Land Tax Amendment Bill 2020 were both introduced into the House of Assembly on 24 June 2020 by the Hon Michael Ferguson, and both Bills passed the Legislative Council on the same day.

The Homebuilder Grants Bill 2020 was assented to as the Homebuilder Grants Act 2020 (Act No 15 of 2020), while the Land Tax Amendment Bill 2020 was assented to as the Land Tax Amendment Act 2020 (Act No 14 of 2020). Both Acts have commenced.

Background

According to the Explanatory Memorandum, the Homebuilder Grants Bill 2020 will amend the First Home Owner Grant Act 2000 to:

“… establish the Australian Government’s $25 000 HomeBuilder Grant and the Tasmanian Government’s $20 000 Tasmanian HomeBuilder Grant … The Australian Government’s HomeBuilder Grant will provide $25 000 to eligible persons to build a new home or substantially renovate an existing home, where the contract is signed between 4 June 2020 and 31 December 2020”.

In the Minister's speech on the Homebuilder Grants Bill 2020 he said:

“These grants will assist the residential construction market by encouraging the commencement of new home builds and renovations this year … this policy is protecting and creating jobs as we rebuild Tasmania’s economy … almost 500 Tasmanians have already expressed interest in the State’s HomeBuilder Grant and we are keen to see these people get on with their build, create employment, support Tasmanian families and move into their new homes”.

The Explanatory Memorandum to the Land Tax Amendment Bill 2020 indicates the Bill will amend the Land Tax Act 2000 to:

“… include[s] an exemption from land tax in the 2020-21 financial year for commercial property owners that have been adversely financially impacted by COVID-19. The Land Tax Amendment Bill 2020 amends the Land Tax Act 2000 to provide for this exemption”.

Commenting on the Land Tax Amendment Bill 2020, the Minister said in his speech:

“To ensure the land tax exemption is appropriately targeted, commercial land owners will also need to demonstrate that they have been adversely financially impacted by COVID-19 in a manner which is unexpected and significant … this Bill will play an important role in mitigating the economic impact of COVID-19 on commercial land owners in Tasmania …”

Comment and Reaction to the Bills

Executive Director of Master Builders Tasmania, Matthew Pollock said of the Homebuilder Grants Bill 2020 that “75 per cent of upcoming projects had been cancelled or delayed”. Mr Pollock said further:

“We've seen a 6.5 per cent decline in construction employment now, that's about 1,200 jobs, which have been lost over the last few months”.

Mr Pollock is calling for the State Government's $20,000 first home builders grant to be doubled to $40,000, and to apply to any new home or builder in the owner-occupier market for 12 months.

In a Media Release, the Minister said of the Land Tax Amendment Bill 2020:

“… [the Bill] amends the Land Tax Act 2000, allowing for an exemption from land tax in the 2020-21 financial year for commercial property owners who have been adversely financially impacted. This is part of the Tasmanian Liberal Government’s economic and support measures in response to the COVID-19 pandemic.”

Tasmanian Greens MP Cassy O'Connor commented in parliamentary debate on the Homebuilder Grants Bill 2020:

“We would like to see the Government continue to evolve its approach to housing policy. We believe that there is a gap in the market for low income working families and individuals to be able to rent to buy their homes. We have a great program going through Housing Tasmania, which is Homeshare, but that is for existing homes.”

Speaking to ABC News, Minister Ferguson said in response to the suggestion of a wide extension of the grant scheme, that a plan to stimulate the building industry was just days away. He said:

"We certainly are considering all of those very good ideas. It sort of feels like budget week, and we have just a few more days to go before the Premier makes important [project] announcements.”

The Minister said the Premier of Tasmania would reveal a range of infrastructure projects in the near future. Julie Collins, the Member for Franklin told ABC News that she was sceptical about the State Government's ability to deliver on infrastructure and cited delays on projects like the Hobart Airport roundabout, the Bridgewater Bridge and a four-lane Midland Highway. Ms Collins commented:

“What we have seen for the last six years is re-announcement after re-announcement, and big ideas being put out there by the state and federal governments, but they're not actually building anything.”

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