The Queensland government recently handed down its 2020 budget, which includes increases in land tax. However, the move did not sit well with the Property Council of Australia due to the disadvantages that will come from the tax hikes.
Land tax has climbed for all property holdings over $5m in the state, with some offshore investors likely to post almost double of their overall land tax bill.
“Today we have seen extraordinary increases in land tax, totalling an extra $778 million over the next four years,” Property Council Queensland Executive Director Chris Mountford said. “And now Queensland’s rates are far higher than NSW and Victoria.”
Mountford warned that nearly all of the properties that will be affected by the tax hike are home to businesses employing thousands of Queenslanders in industries such as manufacturing, tourism, logistics and trade.
“It is simply not accurate to suggest these taxes won’t be paid by Queenslanders, or won’t affect job-creating investment in the state,” he said. “The reality is that land tax is paid – either directly or indirectly – by the business that operates on the land.”
Mountford also said that in terms of foreign investment, the Queensland premier and ministers are happy to fly around the world spruiking investment in the Sunshine State. However, the need for investment to stack up seems to be forgotten, he said.
“It’s the bottom line on the investor’s spreadsheet that determines whether they invest in Queensland, or anywhere else in the world. This tax slug makes job-generating investment from offshore players in key sectors like tourism less likely in Queensland,” he said. “Sadly, this is just the latest in a long line of tax hits for people who have chosen to invest in Queensland.”
Since October 2016, the Queensland government has implemented new or increased taxes, including the introduction of a new “additional foreign acquirer duty” on residential property; raising of the additional foreign acquirer duty from 3% to 7%; and introduction a land tax surcharge on absentee landowners.
“[There is a total of] nine new or increased taxes in under three years,” Mountford said. “Queensland has a clear structural problem with its budget, and until it is fixed, the tax hits will keep coming, and we will continue to see an underinvestment in the social and economic infrastructure our state needs.”
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