WHAT A DISGRACE QUEENSLAND

 

Changes to Queensland’s tax code that will charge investors land tax based on the value of their entire Australian portfolios regardless of location have broad implications for the country’s landlords, particularly those who might previously have been exempt from some taxes.

Speaking on a recent edition of The Smart Property Investment Show, a podcast produced by REB’s sister publication, host Phil Tarrant was joined by Tony Greco, general manager of technical policy at the Institute of Public Accountants, to break down what these tax adjustments will mean in dollars and cents.

Mr Greco explained that under the new rules, which will come into effect in 2023, Queensland investors will have to report any properties that they own outside of the Sunshine State when doing their state taxes and will now be charged land tax based on the entire value of their portfolio, country-wide.

For example, someone who owns land in Queensland with a tax bill income of $745,000 and a property in Victoria worth $1.565 million would have paid $1,950 in Queensland for the 2022–23 financial year. Next year. That tax bill will shoot up to $8,400, based on the total value of their properties.

The duo have already warned that many investors are currently unaware of this coming change and might be in for a nasty shock when the new rules come into play. For one type of investors, the aggregation rules will hit even harder.

Queensland currently has a land tax exemption for properties valued under $600,000. That will still apply; however, property owners who paid no tax on a property worth $599,999 last year, but have other properties out of state, will now see their bills change drastically.

As Mr Tarrant explained: “An individual landholder with $599,999 in taxable land in Queensland and $400,000 in New South Wales would pay no land tax for the 2022–23 financial year as the Queensland land holding is under the exception threshold. 

“Under the aggregation changes, land tax would be payable in Queensland despite both properties falling under the respective state land tax exemption thresholds. So for each following year, this individual will be paying $2,700 in land tax in Queensland”.

Mr Greco agreed this was certainly a scenario that would play out and would come as a particular shock for investors such as those who have never had a relationship with the land tax office previously and will need to report and pay taxes under the new system, despite their circumstances remaining the same.

The pair opined that these scenarios create a clear disincentive for investors maintaining portfolios in Queensland if they have external holdings and act as a deterrent for landlords considering buying into the state.

Mr Greco described it bluntly as a “tax grab” motivated by COVID-19 budget deficits and posited that investors would certainly be facing changed financial circumstances if other states follow in Queensland’s footsteps.

“It’s certainly a negative for property investors. And listen, Queensland has pulled the trigger. When will the other states follow suit? A lot of states are suffering from budget deficits. They’ve borrowed heavily, so they’re all screaming for cash. So we understand the predicament that they are facing, but this is counterintuitive, because it’s going to disincentivise people to invest in that state,” Mr Greco said.

This is a disgrace and how they are allowed to get away with it is criminal if I were an investor in Queensland I would be up in arms about it all.

What will they do when they sell all the investment properties in Queensland the housing shortage will just get 100 times worse.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO!!

SELLING MOSMAN PARK & THE WESTERN SUBURBS!!

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