Extortionist OZschwitz government ripping people off over granny flats

THE Premier, Morris Iemma, wants people to ease the housing shortage by renting out their granny flats, but the Herald can reveal a Brighton-le-Sands man has been charged $86,000 for doing just that.

Paul Kyriacou said he received a land tax bill from the Office of State Revenue 18 months ago and has racked up $30,000 worth of legal fees fighting it ever since.

"I told them I don't believe I should have to pay, and even if I did, I don't have $86,000. They informed me that they have the power to take my house off me and sell it and take the money," Mr Kyriacou said.

"So when I heard the Premier was telling people to build and rent out granny flats I just flipped. What hypocrisy!"

Mr Iemma said on July 31 that he would lobby the Federal Government to change tax laws so people who built and rented out granny flats would not be subject to capital gains tax.

He said the Planning Minister, Frank Sartor, had been asked to consult councils about modifying planning codes to "ensure that secondary dwellings are permitted wherever possible".

Backyard dwellings would not attract land tax as long as the property owner continued to live in the main house, he said.

The NSW Opposition Leader, Barry O'Farrell, accused Mr Iemma of failing to understand his own land tax laws.

"That announcement was about spin, not substance," Mr O'Farrell said. "What [Mr Kyriacou's case] shows is that individuals that seek to do the right thing - to provide additional accommodation - are then penalised under existing state laws."

Mr O'Farrell said anyone renting out a granny flat should not be exposed to land tax, "but the Office of State Revenue operates on the basis that it will pursue you unless you can prove differently in court".

"It's a State Government desperate to raise as much revenue as possible because of their appalling financial management."

Mr Kyriacou bought his property in 1998. He said he had been living continuously in his main house while renting out the granny flat but the Office of State Revenue refused to believe him.

The matter is before the Administrative Decisions Tribunal.

"Basically, the [Government] has the right to say: 'You owe us money.' And it's up to me to prove they are wrong," he said. "If the Premier wants us all to build granny flats, then thousands of people could be in the same situation.

"If I was cynical, I would say it could be a back-door way of increasing tax revenue."

Mr Iemma told the Herald that land tax is not payable on a granny flat if the actual property is the owner's principal place of residence.

"However, the owner needs to be able to satisfy the Office of State Revenue that the property is in fact used as their primary residence," he said.

"We're determined to build a strong investment climate that helps create new accommodation to ease the rental squeeze.

"I've asked my ministers to start work on our plans and if there are any technical or definitional issues that need to be resolved to give certainty to homeowners, we will address them."

LNK

Extortionist OZschwitz government ripping people off over granny flats

Extortionist OZschwitz government ripping people off over granny flats

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