Current land tax rules in the Sunshine State mean owners pay tax at a rate of 0.45% for $1 million worth of Queensland property, yet an investor who has $1 million in properties split across states will only pay the equivalent of 0.05% in tax.
In a state budget update late last week, Queensland Treasurer Cameron Dick said interstate property speculators can claim the tax-free threshold and take advantage of lower land tax rates in multiple states.
"That means these investors can amass multi-state portfolios that fall below the land tax threshold in any single state," Mr Dick said.
"Queenslanders with their entire landholding in this state can end up paying more tax than these interstate investors.
"Young families in places like Logan and Ipswich face unfair competition from Sydney-based speculators who are flipping properties around the country at a furious rate."
Mr Dick said the intention is to close the loopholes for interstate investors whilst ensuring there are no land tax changes for Queenslanders who own land wholly within the state.
Landholders who own land solely within Queensland can continue to access all available exemptions, such as the principal place of residence and primary production exemptions.
REIQ labels the the regime a 'slap in the face'
Real Estate Institute of Queensland (REIQ) says the State Government's new land tax initiative is a 'slap in the face' to the very sector that is propping up the economy.
With the State Government pocketing soaring stamp duty revenue of $5.38bn in transfer revenue this financial year, REIQ CEO Antonia Mercorella said disappointingly the Government had not consulted with relevant property stakeholder groups on this new land tax regime.
“There is no other state or territory that takes this approach, and by treating property investors with contempt like this time and time again, investors may very well pull up stumps,” Ms Mercorella said.
“For those not scared off from investing in Queensland, and current investors brave enough to stick around, this tax will make their holding costs more expensive and the logical consequence of that is rent goes up."
Image by Brisbane Local Marketing via Unsplash.
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