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A Queensland broker is frustrated at the government’s land tax, which could deter investors from buying in the state as prices already soar.
The Queensland government has revised its land tax, which would see the taxable value of land owned in another Australian state or territory be included when determining the rate of land tax you pay in Queensland.
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The policy would take effect from 30 June 2023 and has been slammed by the NSW Premier Dominic Perrotet pledging against sharing the state’s landholder data.
While the new rules do not impose tax on land in another state, the land tax will be calculated using a formula that takes into account the value of “relevant interstate land”.
As the rates increase as values rise, founder and senior mortgage broker at Borro, Cara Giovinazzo, is concerned it will deter property investors who are already subject to rising rates.
She added while the policy may deter Queenslanders from purchasing investments interstate, it could also deter investors wanting to purchase in Queensland.
“They’ve just rushed out a policy to help address the revenue shortage,” she said.
“It’s an extra tax for investors and we in Queensland at the moment are already facing a rental shortage and housing crisis.
“There’s other ways they could increase revenue for the government and they could do so in ways that actually help stimulate the housing market and help more properties become available.”
Presently, land tax is not imposed on an individual who owns land in Queensland valued below $599,000. However, the new rules will see land tax calculated on the gross value of all Australian land.
Therefore if an investor has a $500,000 property in Queensland, and a $600,000 property in NSW they would be valued at $1.1 million.
Ms Giovinazzo said given the rising interest rates the cost of owning an investment property has already increased, which has led many investors to pass that cost onto renters.
Rental affordability is another major concern across the country, particularly felt in regional Australia that has reported an increase of more than 40 per cent (over 10 years), according to CoreLogic.
In addition, she raised concerns that the tax could fuel investors’ selling, leaving more renters without a home.
“None of this is doing anything to address the key issues in Queensland at the moment around housing shortage and rental crisis,” she said.
“As a broker, I’m seeing lots of clients come through… already really struggling to get service for investment properties.”
She explained lending serviceability for clients had dropped more than $100,000 in some cases.
“We’re getting people that had pre-approvals to buy investment properties that are caught,” she said.
In addition, the cost of materials has gone up contributing to building delays and costs, which is already affecting the housing market.
“Another tax like this will be the nail in the coffin,” she said.
[Related: No negative impact on broker QLD land tax]
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