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Govt rejects Jackson’s criticism over land tax exemption for seniors

The Ministry of Finance moved to counter what it described as “irresponsible comments,” by Louise Jackson, the Opposition’s seniors’ advocate, over land tax.A Government spokesman said Government had to act to raise revenue — but has worked hard to help seniors with their pensions and healthcare, and the majority are still exempt from the tax.Mrs Jackson complained earlier this week that some over 65s have been upset at getting their first bills since their land tax break was partially withdrawn.The tax break was in place for all seniors from 2005 until 2012. Prior to 2005, over-65s were only exempt if their home had an ARV (Annual Rental Value) of less than $40,000.Government announced a policy change in the February 2012 budget amid a revenue shortfall. Those with properties with ARVs above $50,000 now have to pay tax on the portion above that threshold.Seniors whose properties have an ARV of less than $50,000 an estimated market value of up to about $1 million continue to be exempt.Premier and Minister of Finance Paula Cox said at Budget time that the move was necessary to increase Government revenue by around $4 million.She expected around 1,000 seniors to have to start paying land tax again as a result. The relevant legislation was passed in March and the tax demands have now started arriving.Mrs Jackson told The Royal Gazette: “The Progressive Labour Party Government’s decision to withdraw an election-time promise of land tax exemptions for seniors has exasperated many.“The Government gave seniors the exemption and they budgeted accordingly.“The exemption meant many seniors were able to stay in their homestead. Now many are being pushed to the brink.”Responding to her remarks, a Government spokesman said notice of the policy change had been given to seniors via a pre-Budget report in December 2011, public forums and meetings with stakeholders.He said of the reasons for the change: “The primary policy objective of this rollback was to continue to provide this relief to a vast majority of pensioners while reducing this annual tax concession of $6.6 million.“This policy objective has been achieved, as 76 percent of our seniors still have the full exemption from land tax and this revenue concession has been reduced from $6.6 million to just over $2 million.“This action should in no way undermine this Government’s commitment to enhance the quality of life of our senior citizens.“The Government is continually examining ways to further enhance and improve the quality of life for our seniors, as evident by this action, which still provides an absolute land tax exemption to 76 percent of our seniors, also exemption of the primary family homestead from stamp duty, which would otherwise be payable upon the death of an owner.”He further praised Government for introducing prescription drug benefits and the FutureCare health insurance scheme for seniors and for ten pension increases in 13 years, which have increased total benefits by 52 percent, or $336 per month.“The benefit increases have exceeded the prevailing rate of inflation, placing seniors’ pensions in good stead.”