In a backflip worthy of a competitor at the 2032 Olympic Games in Brisbane, Qld Premier Annastacia Palaszczuk has now ditched the 2023 land tax changes which sought to assess land tax based on land holdings throughout Australia.
Shelved at least for now but perhaps not forgotten.
Earlier this week, the Qld Treasurer Cameron Dick was adamant the changes would proceed.
"It is understood Ms Palaszczuk made the decision on Thursday night to shelve the scheme after speaking to her interstate counterparts."
NSW, NT and Tasmania were not particularly keen to co-operate.
The Qld Treasurer claimed the tax was to close a loophole used by people in Sydney to flip properties in Qld. However, this side stepped the fact that it applied equally to people in Qld who owned an interstate property. The Government's own example of "Lena" on its website related to a person who owned a property in Qld who then buys a property in Victoria.
The Qld Treasurer also claimed that investors use the tax-free thresholds in each State to avoid paying land tax. While this may be the case, he offered no details on how widespread this practice is.
He also stated that rents in Qld would not be affected by the land tax changes. It seems reasonable that any landlord impacted by the land tax changes would have tried to pass at least some of that cost onto their tenants. The timing of the land tax changes, in the midst of a rental crisis, was unfortunate.
The now scrapped changes would have resulted in a person already paying land tax in another State being assessed on that property again by the Qld government. No credit was to be given for the land tax already paid in that other State.
It would be interesting to see the Qld government's evidence that investors use the tax-free thresholds in each State to avoid paying land tax. I would be surprised if land tax avoidance is the primary broad-based reason for interstate investment property decisions. But, if that is the case, perhaps something can be (better) tailored to deal with it.
Qld shelves controversial land tax plan
September 2022
© PELEN 2022
The content of this publication is intended to provide a general overview on matters which may be of interest. It is not intended to be comprehensive. It does not constitute advice in relation to particular circumstances nor does it constitute the provision of legal services, legal advice or financial product advice.