The Palaszczuk Government in Queensland recently approved land tax legislation that would’ve significantly affected property prices and been bad news for investors. After considerable criticism and controversy from media and other states and territory leaders, Premier Annastacia Palaszczuk has withdrawn the proposed piece of legislation. The update to the Queensland land tax is that it’s been dropped.
A brief look at the QLD land tax legislation
Currently, every state government charges land tax on the total value of taxable land held in their particular state. Each state has a threshold value that has to be exceeded before tax is charged. If the combined value of your land does not exceed the threshold, no land tax is payable.
The value of your land is taken from the Valuer General’s assessment of unimproved value – found on your annual rates notice – which is usually less than market value. Land tax is not applicable on your owner-occupied home or farming (primary production) properties.
What the new land tax law sought to do
The Palaszczuk Government in Queensland approved a new land tax law that would’ve been effective 30th June 2023, which would significantly affect property prices and investors.
The proposed legislation stated that from June 2023, all land tax applicable properties owned in Australia would be included in the calculation for land tax payable for investment property held in Queensland. This new law would calculate the tax based on the total statutory value of your land located in Queensland AND the statutory value of your interstate land.
Calculating these amounts based on the examples provided by the Queensland Government website show that the new law would have pushed the tax up by over 1000%.
Mortgage Business reported that economists assessed it would affect approximately 10,000 investors and recover almost $20 million annually, from 2023–24, for the Queensland State Government.
Good news for property investors in Queensland
Around the same time that we at Step Up Financial raised our concerns with our clients, so did the pressure mount from the Queensland opposition, other states and property groups opposing the new land tax legislation.
In fact, NSW Premier Dominic Perrottet refused to supply data for NSW investors invested in Queensland property.
In a move announced in the past week, the Palaszczuk Government has dropped the proposed land tax. According to media outlets, the Sydney Morning Herald and Mortgage Business, Premier Annastacia Palaszczuk met with interstate counterparts to discuss the concerns raised around the land tax change. Queensland Treasurer Cameron Dick confirmed that the Government has dropped the controversial land tax law.
If you’d like to discuss your property portfolio or want property investment advice, speak to one of our financial planners or contact us to make an appointment.
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