Why tax hikes will hurt every Queenslander

The Property Council has escalated efforts to avert the Queensland Government’s planned increases to land tax and foreign acquirer duty, with a call not to wipe the state off the “investment map”.

A public advertising and media push has highlighted the true impact of the proposed tax hikes. 

The Palaszczuk Government intends to introduce new land tax thresholds for aggregated land holdings with an unimproved value above $10 million. Individuals, companies and trusts who are within this new threshold will be subjected to a 25 per cent increase in the rate of land tax from 1 July 2018.

An increase to the government’s additional foreign acquirer duty, up from three to seven per cent, will also apply from 1 July 2018.

“While the government has pitched the increases as a ‘Robin Hood tax’ on the big-end-of-town, the true cost of these increases will be paid by all of us,” says the Property Council’s executive director Chris Mountford.

“Increases to land tax will see higher rents and occupancy costs passed through to Queensland businesses who lease space in affected buildings.

“This increased cost of doing business comes at a time when many are already struggling with the rising costs for utilities and other businesses inputs, such as local government rates.”

The Property Council says the likely outcome of these take hikes will be higher occupancy costs for businesses and erosion of Queensland’s tax competitiveness. 

Additional land tax will translate into an additional cost of up to $1,000 for new home buyers.

Mountford says the investments and super savings of thousands of Queenslanders will be affected by the land tax rate increase, which will result in a significant devaluation of commercial assets.

Property Council analysis, based on the government’s revenue estimate of $227 million, has determined that between $1 billion to $1.25 billion could be wiped off commercial property values in Queensland.

“Australian super and investment funds are heavily invested in Queensland commercial properties, and this reduction will have a flow-on impact for ‘mum and dad’ investors and everyday superfund savers.”

The Property Council is calling for the government to abandon the tax increases and commit to review and modernise Queensland’s property tax framework.

“An all-encompassing review of Queensland’s outdated thresholds and property tax rates needs to be undertaken to put Queensland back on the investment map,” Mountford says.

Learn more about the Property Council’s position and related advocacy work.