New land tax plan torpedoed

Ros Burton Principal – The Real Estate People, is thankful a government idea did not come to pass

Queensland – we’ve dodged a bullet. Vigilant investors will be aware the state government had been entertaining thoughts of bringing in a new land tax that would have had a crippling effect on the rental market.

Needless to say, property analysts (and housing bodies across the state) have been very vocal about what a bad idea this was.

But, amazingly, it was the reluctance of other state governments to come to the party that finally forced them to scrap the plan last month, with NSW reportedly refusing to share “crucial data” required to implement the policy. Thank goodness.

The initiative would have seen the state create a new tax law that allowed the Queensland government to use the total value of the investor’s land holdings, including those interstate, in calculating land tax.

It would have had investors dumping properties by the truckload. Something we don’t want as a community.

We’re already enduring the tightest vacancy rates ever seen, so the last thing we need is the government undermining investor confidence and forcing more landlords to place their properties on the market. When we talk about ‘property investors’, there’s a misguided perception that every landlord sits aboard their yacht eating caviar and drinking Dom Perignon. Not so. Often, it’s the ‘Mum and Dad’ investors who have taken the leap and sunk their life savings into a second property in the hope that it will create an income stream for them. Hopefully creating a nest egg for retirement and leaving an asset that can be passed on to their children.

But, every interest rate rise and new government tax directly impacts their ability to pay the extra mortgage and if it gets too hard, they’ll walk away in droves.

As more homes and units disappear from the rental pool, it becomes even harder for individuals and families to find accommodation.

That’s why the government’s change of heart is so welcome.

I know people who look on property investing as being “too complicated” because there’s so much they need to be across.

As an investor myself, I know all you need is a good team behind you (with the expert knowledge to help you through the buying process and then oversee your property’s management).

That’s what we do all day, every day at The Real Estate People, so if you ever want to discuss your situation and hear the many, many positives of becoming a landlord then please give us a call.