Interstate investors to be hit by new Queensland property tax

A national land tax value calculated on the real estate investment in every state will determine the land tax bill for the Queensland portfolio

Interstate investors to be hit by new Queensland property tax
Interstate investors to be hit by new Queensland property tax

The Queensland government has announced a property tax that will hit investors from interstate.

Treasurer Cameron Dick announced the new tax when presenting the state’s mid-year budget update last week.

The Queensland government land tax calculation will include the value of an investor’s real estate assets outside of Queensland to determine a land tax bill on their local investments.

Queensland Treasurer Cameron Dick claims the tax closes a "loophole" as an interstate investor can currently enjoy the tax-free threshold for land holdings worth up to $600,000 in Queensland.

The treasurer says the change won't affect Queenslanders but rather "southern state speculators who are flipping properties at a furious rate".

"We think it's fair enough that families in Logan, Ipswich, in regional Queensland, that are being squeezed by southern state speculators, we think they should they should be given a fair go," Mr Dick said.

The proposal would see a national land tax value calculated for real estate assets in every state and territory, to determine the land tax bill for the Queensland proportion of the portfolio.

There is no separate land tax rate for seniors or pensioners.

An investor with property/s with meeting the $600,000 land value threehold in Queensland and then had a $400,000 land value stemming from New South Wales would pay $2700 per year.

The Queensland Government will determine the taxable value of each parcel of land separately and then combine the value of all the land to determine the total taxable value.

If individual investors own $1 million of land in Queensland, owners currently pay tax at a rate of 0.45 per cent.

Land tax is a state tax, calculated on the freehold land owned in Queensland at midnight on 30 June each year. Queensland land values are assessed annually as at 1 October, with notices issued by 31 March in the following year. An objection must be lodged within 60 days of the date of issue of the Queensland valuation notice.

The new Queensland land tax will apply to full and part ownership of property in Queensland and in another Australian state or territory.

As each state has operated their tax regime separately, Investors have often spread their portfolio across states to mimimise their state-based tax.

“This treatment of property investors as an endless money pit is outrageous – the government is raking in a huge stamp duty windfall, then relying on private investors to provide the lion’s share of housing supply, and now they’re slapping investors yet again with new taxes,” the Real Estate Institute of Queensland CEO Antonia Mercorella said.

Queensland Property Council’s executive director, Jen Williams, said it was "a new way of taxing landholders in Queensland.”

“Our huge concern is that people are going to sell their Queensland investment property, they are not going to pick Queensland as a place to invest in the future, because there is more tax involved if you choose to do so,” she told Radio 4BC.

Queensland's exemptions from land tax include land used as a principal place of residence - occupy the land and no other land continuously as your home for the 6-month period and land used for primary rural production.

The timing of commencement of this reform will be subject to the passage of appropriate legislative amendments.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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