Fresh off the back of the announcement to raise the royalties on mining companies in Queensland, in other words establishing their very own “mining super profits tax” the Labor Government has turned its sights on the rental income of Queenslanders by increasing land tax on property owners.
The move is unprecedented, the laws untested and as such are causing many property owners and investors to jump up and down.
By extending its jurisdiction to property owned interstate, the Queensland Government is essentially slapping property owners with another tax without recognising or giving credit for tax paid in the state where the property is located.
The new laws kick in from 1 July 2023 and will apply a tax using a formula taking into account the value of interstate land – calculated on the total taxable land located in Queensland and the statutory value of land owned interstate. The rate of tax depends on the type of owner and will increase as value rise, with individuals paying a slightly lower rate than companies or trusts.
As explained by Matthew Cridland in the Australian Financial Review, there must be a nexus between a State and a thing it seeks to tax. At this point in time, nexus seems non-existent other than the debt-ridden Queensland Government trying to claw back some revenue into its depleted coffers.
It’s unsurprising the Queensland property industry has already launched calls to scrap the planned tax – the charge to repeal the June tax revisions being led by Real Estate Institute of Queensland.
Similar calls have been made by the State Opposition as well as the NSW Finance Minister Damien Tudehope, who described it as a “blatant tax grab” and potentially unconstitutional.
If deemed unconstitutional then the Queensland Government could be forced back to the drawing board to determine another way to pay down debt, which according to budget figures is headed towards $40 billion by 2025-26.
The economy looks to shed its holiday inflation gain, all eyes turn to the job market, and the year of two halves has commenced. Fuelled up on record food prices and seasonal spending, inflation jumped 1.9% in December alone with annual headline CPI coming in at 7.8% for the year. The results have all but cemented a 0.25% increase in the cash rate in February as policy makers look to shake the economy’s holiday hangover.
With the exciting move to a new central Brisbane office location last year came the opportunity to grow the VISIS team. Kat Nojin and Josh Burgess both joined my team as Associate Advisers in November 2022 and have quickly fit into the fold as we look to service a growing number of clients, particularly in New South Wales.
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