The controversial plan is already causing uproar in the property industry
A controversial new property tax launched by the Queensland government could cost more to collect than it raises, according to industry experts.
The Queensland government has outraged the property industry with a plan to assess land tax on the combined value of all land held anywhere in Australia, The Australian reported. The industry is pushing to have the law repealed. It’s set to take effect just as the Queensland market is hit by a price downturn and a worsening rental market.
Antonia Mercorella, chief executive of the Real Estate Institute of Queensland, told The Australian that the law, which is due to take effect in June 2023, had been pushed through parliament without proper tax or legal advice.
“It is irreconcilable that the Treasury expects to legitimately raise tax on the basis of value of property held outside of Queensland for the purpose of funding infrastructure within Queensland,” she said.
Leisa Rafter, chair of the Tax Institute’s Queensland Committee, warned that the tax is actually likely to end up costing the government money.
“The changes to land tax are likely to increase the compliance costs for taxpayers as well as the administration costs of the Queensland revenue office,” Rafter told The Australian. “There is a potential for the combined compliance and administrative costs to outweigh the revenue collected.”
The move has incurred the wrath of property investors as well. Nearly a third of Australia’s housing stock is held by investors.
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“It’s a dangerous move, and if other states see Queensland pulling in revenue from around the country they could follow it,” said Real Estate Institute of Australia president Hayden Groves. “It has never been done before, and for good reason.”
Market-watchers warn that the new tax will deter interstate investors and accelerate price drops.
Queensland has been popular with non-resident investors due to its affordability, The Australian reported. The median home price in Brisbane is about $762,000, compared to Sydney’s $1.07 million.
But the new tax could give investors pause. It also follows a recent federal rule change that bars investors who travel interstate to visit an investment property from claiming expenses on the visit.
“I think anyone who has different properties around the country and was weighing up these changes would consider selling in Queensland first,” Groves told The Australian.
