Letter to the Editor

Another property tax -no way!

A Manukau City Council Working Party has recommended the introduction of a new tax called the Real Estate Transfer Tax. In a submission to a Government Rates Inquiry the Council proposed the system as an alternative to the current property value-based rating system. The proposal is unworkable and unfair.

The tax works like this – the Council would be empowered to impose a tax of up to a certain percentage, to be determined by the Council, of the gross sale price of all real estate sales within the city. The funds raised by the tax would be applied for the same purposes as the Council’s general rating system.

The Council working party proposed this system to the Council who forwarded it to the Government Rates Inquiry. Two of my Mayoral opponents supported this proposal. Dick Quax is now trying to distance himself from his support for the working party recommendation – another developing flip flop? The other - Arthur Anae, is an enthusiastic supporter of this system of tax. He thinks it would be much fairer than rates.

Lets be clear - it is not fair because only home property owners, businesses and land owners pay. This means even fewer would be paying for Council services.

Property value-based rates as a mechanism for funding Councils is also unfair, particularly on the elderly. It is complicated and allows many of the residents in our city to make no direct contribution to the City’s costs. We need something new and better for the future.

The best system to replace rates is where is where all pay through income tax. I want Government to consider the merits of a City Tax, where each would pay according to their income. I believe that debate on this hugely important issue has only just started with this Rates Enquiry. As a candidate for the Mayoralty I stand committed to actively pursue a fairer funding system as we plan for the future of our city.

A fairer funding system will most certainly not include a real estate transfer tax.

Len Brown
Mayoral Candidate – Manukau City 2007

ENDS

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