Real estate organisations in Queensland and South Australia have launched fresh calls for their states to provide investors with relief from land tax.
After Queensland’s Department of Natural Resources and Water released its land valuation figures in March, the Property Council of Australia’s Queensland branch executive director, Steve Greenwood, called for a review of land tax.
The valuation figures showed large land valuation increases across most areas of Queensland.
“Statutory land valuations across the state are the basis for land tax calculations paid by businesses,” Greenwood says.
“An increase in land valuations means an automatic increase in land tax paid by the property owner – often moving them into higher tax thresholds.
“Owners then have no choice but to pass these costs on to their tenants – (including) small business owners and residential tenants - through higher rents.
“The last number of years has seen very significant increases in land valuations across Queensland and the State Government has been bathing in a waterfall of cash as a result.
“The overall land tax take is expected to increase from $523 million for the 06/07 financial year to $622 million for the 07/08 year – an increase of almost 20 per cent in one year.
“Now is the time to recognise that property owners and therefore tenants are paying far more than their share of the tax burden.
“It needs to be remembered that Queensland is in the midst of a housing affordability crisis, with renters struggling to find affordable properties right across the state.
“An increase in land tax will inevitably mean an increase in housing rents,” he says.
The Real Estate Institute of South Australia (REISA), meanwhile, says in its pre-budget submission to the State Government that land tax is singling out prudent investors and creating an unfair financial burden which is ultimately being carried by the whole community.
“Property investors, who are often ‘mums and dads’ who have worked towards self sufficiency, are being singled out by the State Government through land tax and these costs cannot keep being absorbed,” REISA president Robin Turner says.
“No other investment carries such a heavy taxation burden, so many people are considering alternative investments. This will have a direct impact on availability of quality rental accommodation in South Australia.”