By Bev Jordan
Local residents’ groups are sounding an alarm over the State Government’s proposed Land Value Contributions proposal saying it is effectively a land tax on family homes.
Members of Box Hill Nelson Progress Association and Rouse Hill Heights Action Group spoke to the Hills to Hawkesbury Community News saying they were shocked by how quickly and quietly the proposed changes to planning legislation had passed through State Parliament’s Lower House.
It is yet to be debated before the Upper House but the Department of Planning and Environment has previously stated that the new infrastructure contributions system is expected to be in place by July 1st 2022.
Currently, the costs of the land acquisition and the construction of infrastructure on new developments are borne by the developer when they develop the land.
The proposed changes will see landowners of rezoned land having to pay Land Value Contributions to the local council when the land is either sold, or developed which can be up to 20 percent of the value of the land or the dedication of land to council for infrastructure of the same value.
Multiple residents groups in North-West and South West Sydney have made objections to the proposals and written to MPs to voice their concerns.
There have been more than 800 submissions in relation to the proposal.
The residents’ groups say that there has been very little public consultation with people owning acreage and most groups knew nothing about it until the public exhibition period closed just before Christmas.
In a letter to Upper House MPs last month Colleen Abela from the Rouse Hill residents’ group urged MPs not to vote for the legislation.
“The bill seeks to relieve developers of the need to pay for some of the infrastructure when they develop Greenfield areas, and put that impost on the acreage owners- _ to put a 20% tax on the price that acreage landowners get when they sell to developers.
“This is virtually a de facto Capital Gains Tax, and unlike the CGT, it also applies to the family home! This bill won’t lower the costs of housing land, it will just lower the developers costs and raise their profits,” she wrote.
She has been working with several other groups to get the details of the LVC out into the community. “There are still an awful lot of people who don’t know about this,” she said.
Vicki Giannoulis, President of the Box Hill Nelson Progress Association said acreage landowners in North Western Sydney were strongly opposed to the proposed changes to development contributions saying it was an additional Capital Gains Tax.
The Nelson Box Hill Progress Association submission stated: “There is already a Capital Gains Tax (CGT) levied by the Federal Government, Land Tax levied by the State Government, and rates charged by the Councils, all based on the value of the land, either annually or when it is sold. This is now an additional tax.”
Residents say the introduction of LVC will be a gain for developers who will pay less to develop the land.
A response from the the Minister for Planning Anthony Roberts to the submission said:
“This initiative is not a tax but seeks to share the costs of future infrastructure with everyone that benefits from the rezoning of land for more intensive uses.”
Hills Shire Mayor Peter Gangemi said: “This component of the reform has the potential to impact residents who own land that may be rezoned for development in the future, although land covered by existing contributions plans won’t be impacted.
“It’s important that land owners of sites that may one day be the subject of rezoning understand this change means people who receive a significant financial gain may be required to contribute some of their windfall to pay for infrastructure associated with that rezoning,” he said.
“While the time for public submissions has formally closed, I urge residents to read the information available at www.planning.nsw.gov.au/Policy-and-Legislation/Infrastructure/Infrastructure-Funding/Improving-the-infrastructure-contributions-system and contact the State Government at infrastructure.contributions@ planning.nsw.gov.au should you have any enquiries or concerns,” he said.