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Queensland\u2019s \u201cgenerous\u201d tax system will soon be reformed to level the playing field between local and interstate investors.<\/p>\n
As outlined in the 2021\u201322 Budget Update \u2013 Mid-Year Fiscal and Economic Review, the Queensland government is eyeing to close the \u201cloophole\u201d in the state\u2019s land tax system, which allows interstate investors, particularly those who hold investments in other states, to bear less liability.<\/p>\n
Under the \u201cfairer\u201d land tax system envisioned in the budget update, tax arrangements will be amended to account for the total value of land held interstate when assessing land tax liability.<\/p>\n
Here\u2019s an excerpt from the budget update:<\/p>\n
A total national taxable land value will be established for each Queensland landholder, which will continue to exclude exempt land such as principal place of residence.<\/em><\/p>\n The national taxable value will determine the appropriate tax rate that will then be applied to the Queensland proportion of the value of the individual or entity\u2019s landholdings.<\/em><\/p>\n In the current system, a local investor with a $1m property would pay $4,500 in land tax, significantly higher than the $500 duty required for an investor with a $600,000 property in Queensland and a $400,000 property in New South Wales.<\/p>\n With the new approach, the interstate investor will now be charged with a $2,700 land tax in Queensland.<\/p>\n The state government assured that the change will not affect investors who only own land in Queensland.<\/p>\n Furthermore, the state said investors would still be able to access all available exemptions even with an expected policy that would legislate the reforms.<\/p>\n Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said the announcement of the changes in land tax is a \u201cslap in the face\u201d to sector supporting the local economy.<\/p>\n \u201cThis treatment of property investors as an endless money pit is outrageous \u2013 the government is raking in a huge stamp duty windfall, then relying on private investors to provide the lion\u2019s share of housing supply, and now they\u2019re slapping investors yet again with new taxes,\u201d Ms Mercorella said.<\/p>\n The state\u2019s mid-year budget showed a $5.38bn stamp duty revenue so far in the current financial year, with a projected end figure at around $16.53bn to $19.93bn.<\/p>\n Ms Mercorella said the government had not consulted with relevant property stakeholder groups on this new land tax regime, which was the wrong move at the wrong time.<\/p>\n \u201cFrom a practical standpoint, it\u2019s also baffling to understand how on earth they intend to get this data in order to double-tax investors who are already paying this tax elsewhere,\u201d she said.<\/p>\n \u201cThere is no other state or territory that takes this approach, and by treating property investors with contempt like this time and time again, investors may very well pull up stumps.\u201d<\/p>\n These reforms, Mr Mercorella believes, would scare off potential investors and would significantly increase the holding costs of existing investors, which would then result in higher rents.<\/p>\n \u201cIt shows the Government lacks the ability to think outside the square and come up with alternative and innovative solutions to find new revenue streams,\u201d she said.<\/p>\n \u201cYou only have to look at the timing of this bombshell legislative reform to see the government are clearly trying to sneak this in under the radar at a time most people have clocked off for the year.\u201d<\/p>\n \u2014<\/p>\n Photo by @frankbusch on Unsplash.<\/p>\n<\/p><\/div>\n
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