Liberal leader Jeremy Hanson says a Liberal government would freeze rates and stamp duty at current levels, with no further reductions in stamp duty and no more increases in rates, other than annual indexation.
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His election promise comes as analysis of the new five-year tax plan shows the average rates under Labor's trajectory will more than double over a decade, from $1276 in 2011 to $2664 in 2021. Perhaps half of the increase is due to annual indexation, with rates currently being indexed at 3.5 per cent. The rest is due to Labor's year-on-year increases in rates, to make up for gradual cuts to stamp duty on property sales.
In his budget reply speech on Thursday, Mr Hanson said stamp duty would remain at current levels under a Liberal government. The ongoing cuts planned by Labor would be halted, as would Labor's plan to abolish stamp duty altogether for commercial property sales under $1.5 million over two years.
The Liberals would not reverse any changes to date, but would stop the transition from stamp duty to rates where it stood.
"We will not be transferring $266 million a year on to rates," Mr Hanson said, referring to the amount collected in stamp duty at the moment, which Labor proposes to transfer to rates over 15 years or more.
"That does mean some stamp duty will remain, but only at the higher end of the property market on those who can most afford it, and only when people choose to move – not put onto the rates of every Canberran, every year, whether they can afford it or not."
Rates would continue to be indexed each year as they are now.
The indexation of rates complicates attempts to get a clear picture of how much they are rising under Labor's tax reform.
The government says it is indexing rates at the wage price index, which the budget pegs at 3.5 per cent in each of the coming three years.
On top of that, there are annual increases from tax reform. For the past five years, the government calculates an average 49 per cent, or $624, increase in rates, of which 13 per cent, or $172, is due to indexation.
For the coming five years, starting July 2017, rates for freestanding houses are to to rise at an average 7 per cent a year, under the package released by Chief Minister Andrew Barr in his budget this week.
The increase is higher for people who own units, who will pay 20 per cent extra in 2017-18 and 15 per cent in 2018-19, before ongoing 7 per cent rises after that.
Currently, Canberra has 110,000 freestanding houses and 44,000 units. Growth in units has outpaced house growth substantially in the past five years, with 3000 new houses and 6000 new units, and the government expects that trend to continue.
People's individual rates depend on where they live since they are calculated on property values. Eight Canberra suburbs now have average rates of more than $3000.
In Red Hill, the average rates are now $4617, up 76 per cent in five years. In Campbell, rates are up 78 per cent over five years to an average $3270. In Ainslie rates are up 70 per cent to an average $3042. In Forrest, rates are up 65 per cent to $4420.
Mr Hanson used his budget reply to paint himself as a "very different" leader to Mr Barr, characterising Mr Barr as a product of "the Labor machine".
"My background before politics of serving 22 years in the army has given me a broader view of life. My career took me all over Australia and throughout some of the most dangerous and underprivileged places in the world. It instilled in me the army's values of respect, teamwork, courage and initiative," Mr Hanson said.
"But more than that, my life before politics instilled in me the principle, the important principle, that you put your people first and you leave no one behind."
