Repeal the property tax system for “rare beasts”: REIQ

Repeal the property tax system for “rare beasts”: REIQ

The institute said commercial and residential property investors in Queensland are expecting a “rude awakening” when the state government’s latest property tax laws come into effect next year.

Antonia Mercorella, chief executive of the Real Estate Institute of Queensland (REIQ), says the bill is ‘as unique as it is illogical’, blaming the government for rushing through the bill without detail or proper consultation with appropriately qualified stakeholders.

His assertions regarding recently passed state government property tax laws that make land taxable in Queensland and other relevant interstate land will be used to calculate the relevant tax bracket a property owner is in. .

For instance, as REB reported earlier this year, if a person owned $300,000 worth of property in Queensland, they would be exempt from tax before July 1. However, under the updated laws, if the same person owned $1m of property in another city, they would be considered to own $1.3m of taxable property – rather than the Queensland part of 300,000 dollars, and subsequently taxed as such.

“It is irreconcilable that the Treasury legitimately expects to raise tax based on the value of property held outside Queensland, for the purpose of funding infrastructure in Queensland,” Ms Mercorella said, adding that the tax manages to harm property owners, tenants, businesses, and small businesses together.

“I would have thought Queensland’s economy would benefit from attracting businesses to operate in our state, bringing skills, innovation and jobs to our growing population.”

Speaking about the consequences of the legislative changes, she explained how commercial rents will rise “through the roof”, while sending a message to businesses to “get their backs off” by packing their bags and taking their operations elsewhere .

Given that the state is currently struggling with the tightest rental market in its history – with 36% of Queensland residents renting – Ms Mercorella thinks now is not the time to risk ‘rocking the boat of the private residential rental stock’, given that the majority of the housing stock is provided by investors private.

“Instead of a carrot, the government has once again used the stick, in yet another desperate grab on the housing sector,” she said.

“Based on the government’s own example, this property tax change will result in a 332% increase in property tax. This is likely to have a negative impact on the attractiveness of investing in Queensland, particularly considering the cumulative effect of all the legislative reforms facing investors.

After characterizing the tax changes as “slap in the face” when they were originally proposed in December 2021, the institute proclaimed that it would continue to advocate against these “impractical property tax changes” and encouraged property owners to do the same.

Ms Mercorella pointed out that there were “many reasons to invest in the Sunshine State”, but she conceded that “with this property tax scheme, the Treasury has not only shaken the confidence of Queensland properties, but he also smote the king”.

“For these reasons, the REIQ will continue to campaign against these changes to property taxation and asks the treasurer to repeal this bombshell legislative reform before it comes into force in 2023.

“REIQ stands ready to work with the Queensland Government on more innovative solutions to remove the burden and inefficiencies of the current tax system,” she concluded.

Repeal the property tax system for “rare beasts”: REIQ

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Last update: September 05, 2022

Posted: September 06, 2022

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