Queensland scraps controversial land tax laws

Following the national cabinet meeting on Friday, the Queensland government has been forced to scrap its controversial land tax laws due to other state governments refusing to hand over the personal data of interstate landlords who hold investment properties in Queensland.

The tax, due to start next year, would calculate how much a Queensland property owner owed based on the total value of all their properties owned Australia-wide. Economists assessed it would affect approximately 10,000 investors and recover almost $20 million a year, from 2023–24, for the Queensland state government.

Last December, Queensland Treasurer Cameron Dick announced the changes to land tax to include interstate land holdings, asserting that some interstate investors “exploited tax-free thresholds in different jurisdictions to minimise their tax obligations”.

In an Australian-first, landholders would have to voluntarily disclose their interstate holdings in other states before being taxed for their Queensland holdings. This would add thousands of extra dollars to their land tax bills each year. The scrapping of the change in land tax is seen as a common-sense move by landholders and has avoided a proposed mass exodus of interstate property investors from the Queensland property market.

Property Investors Council of Australia chairman Ben Kingsley said the decision to scrap was a huge relief and should immediately restore investor confidence in the state.

“We’re really thrilled that common sense has prevailed, and it’s going to be a massive relief for all Queensland renters. The new land tax was going to be diabolical not only for the renters but also for economic activity in Queensland,” he said.

The complexity of the tax and its reliance on self-disclosure by individuals and data sharing by some states had sent a scare through the Queensland property, market as for many interstate investors the increased tax burden would mean that they may have had to sell off their investment properties.

The scrapping of the tax will also have the effect of ensuring that the property market shortage in Queensland would not be negatively impacted and pressure on rents would ease. For many investors had the tax been implemented, it would have amounted to double taxation.

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