Foreign owners of investment property in Queensland are to be slugged with a 1.5 percent land tax surcharge on any property which they hold which has a value of $350,000 or greater as the government in that state seeks additional revenue raising measures in order to maintain a wafer thin operating fiscal surplus.
Announcing the measures in its 2017/18 State Budget, the Queensland State Government says the measures represent a fair contribution to the tax base in that state from which they benefit as the value of their properties benefits from taxpayer funded infrastructure.
“Absentee owners benefit from a high standard of services and infrastructure delivered and maintained by a broad range of taxes,” the Government said in its budget papers.
“The surcharge will ensure absentee owners of land make a further contribution.”
The taxes - will be above and be other land tax payable – is set to raise as much as $20 million over the next financial year and $88.4 million over four years.
Nevertheless, property industry lobby groups slammed the decision, accusing the government of jeopardising the government of breaking an election promise and jeopardising the economy.
“The introduction of a land tax surcharge on foreign property owners comes twelv months after the State Government introduced an additional stamp duty surcharge on foreign property investors,” Property Council (Queensland) Executive Director Chris Mountford said. “Both represent a broken election promise to not introduce new taxes, fees or charges.”
“Foreign investment in residential real estate is a vital part of the Queensland economy. Foreign investment in real estate gets new projects off the ground, increases housing stock, creates jobs and increases tax collections to all levels of government.”
“The Queensland Government is playing a dangerous game by upping taxes on foreign investors. If we keep pushing up the costs of investing here, ultimately another part of the globe will become a more attractive place to invest, and the money and associated jobs will be redirected. We are not just competing with the southern states, we are competing with the rest of the world.”
Outside of foreign taxes, however, there was better news for the state’s property industry in other areas.
A centrepiece of the budget revolves around the decision by the State Government to go it alone on the $5.4 billion Cross River Rail Project, which will generate around 1,500 jobs during each year of construction and for which the Government has committed $2.8 billion over three years including $1.95 billion in real money.
The government also extended the $5,000 boost for first-home-buyers who purchase a new property for six months and allocated money to monitor the implementation of the South-East Queensland Regional Plan.
In addition, the government has announced it will build around 5,000 social homes over the next ten years, generating around 450 jobs in construction per year.