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The National Tax and Accountants' Association has today warned that planned changes to the land tax measures, which are meant to take affect from 1 January 2006, are likely to cripple many small businesses and property investors.

In some cases, these changes may result in land tax increasing by as much as 171%.

A proposal that is being considered by the State Parliament could see the amount of land tax for properties owned in discretionary trusts, unit trusts and other trust structures sky rocket from 1 January 2006.  The State Government has justified the introduction of these changes on the basis that taxpayers have been using trusts structures as a means of circumventing the land tax measures.

However, this heavy handed approach ignores the fact that thousands of Victorian taxpayers own properties in trust structures for genuine commercial reasons.  In any case, the proposed changes do not merely address any supposed land tax avoidance, they go much further and can actually increase the revenue generated by land tax.

Andrew Gardiner , Senior Tax Manager with the National Tax and Accountants' Association today stated "These changes are a major slap in the face for most land owners, and we call upon these changes to be dumped immediately".

Andrew Gardiner also stated "By way of example, these changes may see land tax increase by a whopping $6,320 or 171% for a property that is owned in a trust and has an unimproved value of $1,000,000.  These measures are largely targeted at both small business taxpayers and property investors throughout Victoria , at a time when they can least afford it".