CANBERRA, Australia — Australia state of Victoria’s acting premier Dan Andrews has defended plans to increase property taxes for the wealthy after Prime Minister Scott Morrison described the move as “punishing”.
Last week, Treasurer Tim Pallas announced AU$2.7 billion ($2.11 billion) in budget measures that will mean developers and other wealthy landowners making a larger contribution compared with those at the bottom and middle of the wealth scale.
The changes include a 0.25 percent increase in land tax for taxable landholdings between AU$1.8 million ($1.40 million) and AU$3 million ($2.34 million) and 0.3 percent for those exceeding AU$3 million ($2.34 million).
Stamp duty on properties worth more than AU$2 million ($1.56 million) will increase from 5.5 percent to 6.5 percent, raising an extra AU$137 million ($106.89 million) a year on average.
A new windfall gains tax will be also introduced for properties whose value is boosted when councils rezone them. Morrison described the proposed tax increases as “punishing” in an exclusive interview with a reputed Australian economic daily.
“We want people to take the dividends of the recovery to invest it back into the recovery. We don’t want to take it off them,” he said.
“For anyone who’s investing or doing a bit better, it basically sorts of says, ‘we’ll take it.
“They’re taking the dividends of recovery.”
Acting Premier James Merlino said the new taxes were “appropriate, proportionate and absolutely reasonable”.
“For those that have made significant profits, it’s appropriate that there’s a greater contribution,” he told reporters in Ballarat.
James Anthony Merlino is an Australian politician serving as a member of Monbulk in the Victorian Legislative Assembly, as a member of the Labor Party. He has been acting Premier of Victoria since March 9, 2021, as well as Deputy Premier of Victoria and Minister for Education since December 2014.
The Australian Labor Party, also simply known as Labor and historically spelled Labour, is the major center-left political party in Australia, one of two major parties in Australian politics, along with the center-right Liberal Party of Australia.
Merlino said stamp duty will remain lower than New South Wale’s top rate of seven percent.
“If you’re purchasing a home for $2.5 million, your stamp duty right now is AU$137,500 ($107,283), it goes up to AU$142,500 ($111,184),” he said.
“If you own landholdings of AU$2 million ($1.56 million), your land tax will go up by AU$500 ($390).
“It is modest.”
Pallas on May 15 said the reforms were consistent with those being brought in by US President Joe Biden to “mobilize new revenue from those in the best position to contribute”.
(Edited by Vaibhav Vishwanath Pawar and Ritaban Misra. Map by Urvashi Makwana.)
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