Land tax hikes in NSW threaten businesses and drive up rents, warns property firm
By
Previous post
Kingsmede, a prominent investment company, has raised concerns over escalating land tax rates in New South Wales, warning they could cripple businesses and lead to higher rents.
The company, which specialises in industrial, office, self-storage, and residential land subdivisions, says the tax increases are putting significant pressure on tenants, particularly small and medium-sized enterprises.
Mr Somerton, CFO and General Counsel of Kingsmede, said the effects of the tax hikes were “devastating”.
“Our tenants, many of whom are small and medium-sized enterprises, are struggling to absorb these additional costs, which are ultimately passed on to consumers in the form of higher prices for goods and services,” Mr Somerton said.
Kingsmede provided a case study of a property in Padstow, NSW, where land tax has increased by 41% in 2024, following a 70% rise in 2023.
The company claims that land tax now accounts for 61% of the total property outgoings, which are passed on to tenants.
According to Kingsmede, government charges at all levels now make up 78% of a tenant’s total contribution to the property.
==
==
“This is an unreasonable and unsustainable proportion, and it affects their cash flow, profitability, and competitiveness,” Mr Somerton said.
The company warns that if the trend continues, businesses may be forced to relocate to other states, potentially impacting NSW’s economic growth.
Kingsmede has been actively communicating with its tenants about the rising costs and encouraging them to voice their concerns to elected officials.
The firm is calling for a broader public discussion on the long-term consequences of the current tax policy, which it describes as “unsustainable”.
“We are committed to working with policymakers and industry stakeholders to find solutions that protect businesses, support economic growth, and ensure affordable rental options for all,” Mr Somerton added.
Kingsmede is urging the NSW government to reconsider its approach to land taxation and prioritise policies that foster a vibrant and sustainable economy.
The company’s concerns echo those of other industry leaders who have warned about the potential negative impacts of rising land taxes on investment in NSW and rental affordability.