New land tax law branded ‘illogical’
A CONTROVERSIAL new land tax won’t come into effect until next year but investors are already selling up their Glitter Strip holdings, experts say.
The state government’s land tax reform hit the headlines last week for all the wrong reasons with property experts labelling it “illogical” and “irrational”.
In short, the new land tax will sting Queensland property owners for their investment properties in Queensland as well as their investment properties held in other states from 2023.
A spokesman for the Queensland Treasurer said the Revenue Legislation Amendment Bill was passed unanimously in Parliament in June 2022, with the legislation aiming to close a “land tax loophole” where interstate investors who owned properties across several states can access the tax-free threshold multiple times.
Experts on the ground here fear the move will frighten interstate investors, hurt our mum and dad investors, and have a flow-on effect to the rental crisis.
“It’s the most irrational decision I’ve seen anyone do in the middle of a crisis,” Ray White Surfers Paradise Group boss Andrew Bell said.
“It’s having an immediate effect. It’s already causing people to say ‘I won’t buy’ and others have rung us to sell.
“There will be less properties to rent and there will be a drive to pass on the land tax
It’s the most irrational decision do I’ve seen anyone a in the middle of crisis Paradise Ray White Surfers boss Andrew Bell
cost in higher rents,” he said.
He said public housing was hard to come by and people were relying on the private rental sector.
“One of the fundamentals of the government is to provide basic needs for the people who elected them.
“One of those basics needs is housing and we know that, currently, there is an acute shortage of rental properties on the Gold Coast, it’s the worst in the city’s history.”
“At the very time we should be incentivising, the government has gone in the reverse,” he said.
“They should be finding ways to attract people to buy investment properties.
“Those incentives could include the halving of stamp duty if the property is in the rental pool for a minimum of five years and the elimination of land tax or a significant reduction for a similar period.”
The Real Estate Institute of Queensland has called for a repeal of the ‘illogical’ new land tax regime with many backing the REIQ’s calls.
“This new land tax regime is as unique as it is illogical,” REIQ CEO Antonia Mercorella said.
“There’s no other state or territory that charges state land tax based on the value of properties held across Australia and outside the jurisdiction where the tax is collected.
Buyers agent Oliver Dunstan, of Rose and Jones, said it would bring, “less rentals and more pain for tenants”.
The law will come into effect on January 1, 2024 and apply to land tax assessments in the 2023-24 financial year.