Foreign owners of investment property in Queensland will be slammed with a 1.5% land tax surcharge on assets with a value of $350,000 or more.
The state government is seeking additional revenue in order to maintain a wafer-thin operating fiscal surplus.
The Palaszczuk government announced the new measure in its 2017-18 state budget, and said the surcharge represents a fair contribution to the tax base, considering the numerous benefits foreign property investors in Queensland enjoy.
“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.”
However, property industry lobby groups have slammed the decision, accusing the state government of breaking a key election promise and jeopardising the economy.
“The introduction of a land tax surcharge on foreign property owners comes twelve months after the state government introduced an additional stamp duty surcharge on foreign property investors,” said Christopher Mountford, executive director of the Property Council (Queensland).
“Both represent a broken election promise to not introduce new taxes, fees or charges.”
Mountford noted that foreign investment in residential real estate is a vital part of the Queensland economy.
“[It] gets new projects off the ground, increases housing stock, creates jobs and increases tax collections to all levels of government,” he said.
Mountford called out the Palaszczuk government, saying it was playing a dangerous game by increasing 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,” he said.