Queensland property sector hit with shock tax hike

Queensland property developers are crying foul over Premier Anna Bligh’s decision to impose a special tax on landholdings worth more than $5 million, claiming the decision will cost 3500 jobs.

Queensland property developers are crying foul over Premier Anna Bligh’s decision to impose a special tax on landholdings worth more than $5 million, claiming the decision will cost 3500 jobs.

The special tax is part of a series of measures introduced by Bligh and Queenland Treasurer Andrew Fraser as the pair attempt to plug a $4.3 billon hole in the state’s budget over the next four years.

Under the property tax surcharge, landholders who own parcels of land will pay a 0.5% surcharge from 2009-10.

Steve Greenwood, executive director of the Property Council of Australia’s Queensland division, says this will mean the owner of a $5 million property will face a land tax bill of $75,000 and an extra charge of $100,000.

Greenwood says he is shocked an disappointed by the Government’s decision to hit the property sector, which employs one in seven workers in the state.

“This came out of the blue. In fact we had spent a lot of effort, about two months, explaining that any increase in land tax would be extremely regressive,” he says. “You have to question their economic credentials.”

Greenwood estimates that the decision will cost around 3500 jobs across the economy as landowners pass on the tax in the form of higher rents.

“We are seeing very significant job losses across the board and the land tax increase will exacerbate that. A much smarter move would have been to reduce the land tax rate and actually stimulate the sector.”

On top of the property tax surcharge, the Bligh Government has also raised vehicle registration costs by an average of 6.5% and delayed the abolition of transfer duty on core business assets by 18 months.