Land tax grab a burden for all
MANY Townsville investors who own buildings or land assets in the region will have recently received their land tax notices.
These will be the first assessments issued since land tax increases were adopted in the State Budget.
While most Townsvilleans will never directly pay land tax, its effects wash through the whole economy, increasing the cost of doing business and impacting on all of us.
Land tax is charged on freehold land owned in Queensland. A competitive, flexible land tax regime can be absorbed without much economic discomfort, but outdated thresholds or dramatic increases cause significant pain.
Most local businesses lease their premises from larger landholders who are liable to pay land tax. For many of these businesses, the Government’s 25 per cent increase to the highest threshold of the tax will result in an immediate rent increase. For others, the sting of the hikes will be felt when their leases are renegotiated.
With electricity, water, rates and other running costs rising dramatically, these tax increases have come at an acute time for Townsville’s business community.
Beyond the impact for tenants, the increases have also made our tax regime significantly less competitive than our southern neighbours, risk- ing a reduction in investor interest in local opportunities.
Companies weighing up the merits of investing in a significant property asset in Townsville face a new equation, with the land tax bill 13 per cent higher than a similar asset in NSW, and 4 per cent higher than Victoria. Unlike NSW, which has annual valuations and reviews of thresholds, Queensland has been subjected to a decade of bracket creep.
More than $ 1.5 billion in economic activity is generated annually by Townsville’s property industry, employing 12,932 locals. When you consider the economic importance of the industry to the Townsville region, you see the risk that any decline in investor activity might pose for local jobs and the city’s prosperity.
Decisions by policymakers in Brisbane to squeeze more revenue from this part of the economy are shortsighted and ignore the flow- on impacts on the entire community.