Tas Bill to Introduce Tax Initiatives for Affordable Housing Support

Thursday 8 July 2021 @ 10.27 a.m. | Legal Research | Taxation

The Treasury Miscellaneous (Cost of Living and Affordable Housing Support) Bill 2021 (Tas) (“the Bill) was introduced to Tasmania’s House of Assembly (“the Assembly”) on 22 June 2021 by Minister for Finance Michael Ferguson.

The Bill passed the Assembly on 24 June 2021 and was introduced to the Legislative Council (“the Council”) on the same day. On 1 July, it passed the Council with amendments.

The Bill proposes amendments to the following legislation:

  • Duties Act 2001 (Tas)
  • First Home Owner Grant Act 2000 (Tas)
  • Land Tax Act 2000 (Tas)
  • Land Tax Rating Act 2000 (Tas)
  • Taxation Administration Act 1997 (Tas)

About the Bill

The Minister's Media Release on 20 June 2021 summarises that, if passed, the Bill will have the effect of:

  • "increasing the First Home Owners Grant from $20,000 to $30,000, backdated to 1 April 2021 until 30 June 2022;
  • increasing the threshold for the 50 per cent stamp duty concession to apply to purchases up to $500,000 for Tasmanians buying their first home and pensioners downsizing their family home, which will be backdated to 16 March 2021;
  • reducing land tax costs by increasing thresholds, allowing payment by instalments on accounts over $500 and reducing interest applied to deferred payments;
  • capping the Motor Accidents Insurance Board duty as part of our new quarterly vehicle registration payment option; and
  • providing a two year waiver of stamp duty on the purchase of new and second hand electric or hydrogen fuel cell vehicles."

According to the Bill’s Explanatory Memorandum, the State Government is:

“committed to introduce several tax initiatives to address concerns regarding increasing land tax liabilities and to address housing affordability”.

Brief Outline of the Amendments

The Bill's Explanatory Memorandum summarises that the Bill seeks to:

  • "amend the Duties Act 2001 (Tas) to:
    • increase the dutiable value of property threshold from $400 000 to $500 000 for the purposes of an eligible transaction for the First Home Buyer Duty Concession and Pensioner Duty Concession;
    • cap the Motor Accidents Insurance Board premium duty (MAIB Duty) at $20.00 per annum and allow the duty to be calculated to align with the vehicle’s registration renewal period while still enabling the existing calculation to continue to apply in limited circumstances; and
    • provide a two year waiver of duty on the purchase of new and second hand electric and hydrogen fuel cell vehicles;
  • amend the First Home Owner Grant Act 2000 (Tas) to increase the grant from $20 000 to $30 000 until 30 June 2022;
  • amend the Land Tax Act 2000 (Tas) to allow the Commissioner of State Revenue to accept payment of land tax in three instalments where the amount of land tax payable in any financial year exceeds $500 (currently $1 000);
  • amend the Land Tax Rating Act 2000 (Tas) to increase the tax free threshold forland tax from $24 999 to $49 999, with the middle tax band threshold now starting from $50 000 and increase the top tax band threshold from $350 000 to $400 000; and
  • amend the Taxation Administration Act 1997 (Tas) to allow for the reduction in the premium rate of interest charged on unpaid tax from eight per cent to four per cent."

Comment on the Proposed Amendments

Commenting on the Bill, Cassie O’Connor (Tasmanian Greens Leader) said the Greens will be supporting the Bill as well as noting that the Bill contains:

“some excellent initiatives here, particularly around encouraging the uptake of electric vehicles through registration offsets”.

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