QLD Land Tax A ‘Slap In The Face’ For Investors Says REIQ

In December of 2021 the Queensland treasurer, Cameron Dick, announced that the Queensland Government would change QLD land tax parameters. This would be in a bid to improve affordability across the state for Queenslanders.

The treasurer argued that under the previous land tax legislation, property investors were able to build multi property portfolios by optimising the higher land tax thresholds in Queensland to avoid paying land tax in any state. It was argued that this practice was driving up property prices and contributing to housing affordability issues.

The intent of the new QLD legislation is to use significantly higher QLD land taxes in order to discourage property investors from building multi property portfolios and hence improve housing affordability.

"We’ll close that loophole while ensuring there are no land tax changes for Queenslanders who own land wholly within our state," the Treasurer revealed. But the reality of this is that property investors are not actually able to invest in multiple properties now due to high tax rates.

How Will This Affect You?

Under the new Land Tax Legislation from the 30th of June 2022, the total value of all taxable land, Australia wide, will be used to determine the amount of tax payable on your QLD properties. Tax has always been one of the hidden costs of property investment, and now could prove to be damaging. Previously, if you had several investment properties but only one in QLD and the land value was below $599,999 you would pay no land tax. However, this is no longer the case under the new legislation.

For example:

• If the total combined taxable value of land exceeds $599,999 - then your tax rate is $500 plus 1 cent for each $1 more than $600,000
• If your total combined taxable value of land exceeds $999,999 - then your tax rate is $4,500 plus 1 cent for each $1 more than $1,000,000

In essence, under the new legislation, if you own an investment property in QLD you will be paying significantly more land tax than before. One of our Queensland members with an investment property in Victoria found that QLD land tax payment increased by a whopping 59%. This is a real slap in the face to QLD property investors who now may have to re-evaluate whether they can continue with their investment. This new ruling means that you will have to carefully evaluate whether you can afford to remain investing in property in Queensland.

QLD Land Tax: Moving Forward

While the aim is to improve affordability within the housing market, the loss in investment from others could prove detrimental, the Queensland Treasurer’s move to amend the land tax laws may have more negative consequences than expected for the state's economy. Currently, Australia is experiencing its worst rental crisis in history and this reform will further limit the supply of rental properties driving rental prices higher and worsening conditions for renters.

According to the 2021 census, the Queensland population is increasing by about 1,100 people per week. The economy has already begun to feel the strains of such a large influx in the population. These reforms are going to undoubtedly scare off potential investors, which will in turn worsen the rental crisis we are seeing in parts of the state.

Existing investors will experience a rise in costs with the introduction of these reforms to the QLD land tax. This will incur a raise in rental prices that will put strain on the general population. Plus, a drop in property sales will directly impact on QLD’s stamp duty revenue collected.

This change affects property owners who have property assets in Queensland, not just people who live in Queensland. This move not only will stop Queensland property owners from buying interstate, but will make many interstate property owners hesitant to invest in Queensland - and even potentially look to sell their Queensland properties to avoid exorbitant land tax.

How Property Club Can Help

The team at Property Club are passionate about making sure property investors don’t get the short end of the stick. We’ve created a petition to highlight the negative impacts of this change. If you’d like to help us dispute this change, you can sign our petition here - and make sure to share it with anyone who could be affected by this change.

Property Club are experts in property investment and can help guide you through any investments you make. If you are concerned about the impact that the QLD land tax will have on your investments, then get in contact today. We are happy to be able to help you navigate this difficult time.