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State property tax cash grab to leave councils short-changed

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Councils could be hit with a $20 million additional cost every second year if the Victorian Government moves to annual property valuations.

MAV President Cr Mary Lalios said the surprise State Budget announcement came without any consultation or detailed costings of the impacts facing communities.

“Councils simply cannot afford a $20 million hit to their finances every second year, particularly under rate capping which already restricts councils’ revenue-raising capacity,” she said.

“Currently, property revaluations are undertaken every two years. Moving to an annual revaluation model will effectively double local government’s current costs, with no benefits identified for either councils or their communities.

"That’s $20 million every two years that could have otherwise paid for important community projects, like upgrades to roads and footpaths, sporting grounds, libraries and playgrounds.

“It appears the driver for this reform is to secure more State revenue from property taxes, which grow along with increases in property values and house sales.

“In contrast, council revenue does not increase as a result of revaluations. The new property values simply redistribute how much each ratepayer contributes towards each council’s budget.”

Cr Lalios said under the proposed changes, councils would have to meet the annual cost of revaluations, and would effectively be subsidising the State’s additional land tax grab.

“Figures in the State Budget papers suggest the government could potentially reap an extra $200 million in land tax in 2019-20, at a cost of $20 million to local ratepayers and no extra revenue for councils.

“This is another example of double-standards after last year the State imposed a 2.5 per cent rate cap on councils while also reaping a massive 10 per cent rise in their own land taxes.

“The government rushed legislation into Parliament last week, before the new working group established to identify the reform’s impacts even had a chance to assess the changes.

“The MAV is currently collating a long list of council concerns, which we will release next week ahead of the proposed property valuation reforms being debated in Parliament.

“While the changes are buried in the State Taxation Acts Amendment Bill 2017, the magnitude of their impacts should not be underestimated.

“The Treasurer must come clean and tell Victorians how much this is really going to cost.

“It is grossly unacceptable to push ahead with law changes that introduce annual property valuations before knowing the financial impacts being imposed on councils and their communities,” she said.

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For further information, contact Cr Mary Lalios on 0447 189 409 or MAV Communications on 9667 5547.