Absentee land tax surcharge takes effect

Absentee land tax surcharge takes effectThe Queensland Government is now imposing a 1.5% land tax surcharge on absentee land owners. This new surcharge, announced in the 2017/18 State Budget, took effect from 1 July, 2017.An ‘absentee’ is already an owner category defined under the Land Tax Act 2011.Any individual who does not ordinarily live in Australia is likely to be considered an absentee by the Office of State Revenue, even if they are an Australian citizen. Public officers and employees of Australian-based companies who are on overseas appointments are exempt. An absentee cannot claim a home or primary production exemption.Currently, absentee owners are charged land tax at the same rate as a company or trustee – with a lower starting threshold and higher rate of taxation than resident individual owners.From 1 July, absentee owners will have to pay a surcharge of 1.5% for each $1 of taxable land value greater than $349,999. This is in addition to their existing rate of land tax.It is important to note that this is not a vacancy tax. The surcharge will apply regardless of whether the property(s) in question are occupied or not.The Government has forecast that $20 million will be raised through this measure in 2017/18.The graph below outlines how the new absentee rate compares to the corporate/trust and resident land tax rates.Strong criticism from the Property Council in response to the new tax has centred on the importance of foreign investment to the Queensland economy.