Queensland land tax a revenue grab: CPA Australia

“Queensland’s new land tax is not a good idea. We are finding it increasingly frustrating that state governments are introducing tax grabs without proper consultation, resulting in poor policy like this,” senior manager tax policy Elinor Kasapidis said.

“Governments are casting around for ways to repair their bottom line but there are better ways to fill the public coffers than by double taxing land owners.

“This is an example of double taxation at its worst. Landlords with property in other states and territories already pay land tax to those governments where the property is located. This is unfair and nothing more than a revenue grab.”

Ms Kasapidis’ comments came after NSW Premier Mr Perrottet said he would refuse to provide home owner information to the Queensland government, which will use interstate holdings to calculate the levy starting next year.

“This is a tax implemented by a state that impacts the residents of NSW. It’s wrong, and we’re not going to comply with it,” the Premier told the Daily Telegraph.

“This is poor financial management by a Labor state government impacting the residents of NSW. They’ve gotten over taxing their own residents and are now trying to tax everybody else across Australia.

“It is lazy policy to simply increase tax.”

Ms Kasapidis backed Mr Perrottet’s stance and said the country’s tax system needed a review to stop “revenue grabs” by state governments.

“We support the NSW Premier’s declaration that NSW will not go down the same path and we encourage other states and territories to commit to this position too,” she said.

“The ongoing introduction of piecemeal revenue grabs by state governments points to the problem of how the states are funded.

“Australia needs GST reform to stop the states from introducing these poorly designed taxes and to be able to transform their land and payroll tax systems. We want to see proper discussions about tax reform before we end up back in the same situation before GST was introduced.”

On Monday (26 September), Queensland Treasurer Cameron Dick backed away from previous suggestions that cooperation from other states would be necessary to administer the tax.

“The data we require to close this loophole is already publicly available,” said a Queensland Treasury spokesperson.

In a demonstration of bipartisan support for Mr Perrottet’s stance, NSW Opposition Leader Chris Minns said if Labor came to power it would also refuse to provide landholder information to its northern counterparts.

“NSW Labor won’t be changing arrangements or looking to provide tax data to governments who pursue this measure,” said Mr Minns. “People shouldn’t have to live in fear that a change in government will mean their details have been passed on by a different government.

“However, the Queensland government is saying they don’t need details from the NSW government, so Dominic Perrottet should be providing advice to homeowners about whether this decision will mean they avoid Queensland taxes.”

The land tax is expected to affect approximately 10,000 investors and recoup the Queensland government almost $20 million a year from 2023–24.

It means an owner’s liability for land tax would be based on the total value of their Australia-wide holdings that are not exempt, not just those in Queensland.

“This value will be used to determine whether the owner has exceeded the tax-free threshold and the applicable general rate of land tax which will ultimately be applied to the Queensland proportion of the value of the Australia-wide landholdings,” said Tony Greco, general manager of technical policy at the IPA.

“Landholders will have to voluntarily disclose their interstate holdings in other states before being taxed for their Queensland holdings.

“If other states do not provide landholder details to the Queensland government, investors will have a very short window when they receive their land tax assessment next year to disclose their interstate land holdings and there’s a hefty penalty for failing to comply on time.

“I am sure the Queensland government will remind landholders of their self-assessment obligations well ahead of the date for issuing land tax assessments for the introduction of the aggregation rule next year.”

Mr Dick said the policy would ensure all residents and investors were paying their fair share of tax.

“I made a decision to ensure people who are avoiding paying land tax pay their fair share in this state,” he said.

“It’s a well-promoted tax avoidance scheme to buy property in different jurisdictions, thereby avoiding the land tax threshold.

“That is the bottom line of this.”