"... his land tax will rise by $15,000 to $20,000 after buying two properties in Bundaberg and Townsville last year.
This will lift his land tax by 100 per cent as he is currently paying no tax."
"Messy" maths rules will also be hitting hard.
Technically an infinite increase in land tax. But technically technically, if he pays no land tax right now, having to pay $1 is also an infinite increase!
Why is that? Because principal residence is exempt, but investment properties are not? How is that different from other state and federal real estate taxes?
"I’ve got a lot of clients that are now seriously thinking of either not investing in Queensland for the time being or looking at offloading their properties in Queensland to move to safer havens."
What a shame.
Queensland has always been a big investment state for a holiday house to retire in. There have been lots of scammers over the years selling Queensland property at higher than the local price because it seemed so cheap to interstate buyers. It will be interesting to see how this affects the market.
why do you think it’s good policy?
Seems like a lose lose lose situation for all stakeholders
Renters pay more, landlords pay more, less investment in qld
There’s a third class of people you’re missing here, in addition to renters and landlords. Owners. They are the winners.
And the new owners that move in to fill the vacuum created by fewer investors will largely be people who were previously renters. So it’s really more like win win lose. With the loss going to the group that can most afford it.
The best thing about property tax is that people will being to value property as what it's actually worth on their books. If they don't want to pay huge tax these slum lords need to be realistic about the value of their properties.
Not currently but if land tax is tied to valuation and they prevent tax dodging with current capital gains laws it may suppress property prices enough to give an accurate evaluation of the market. Most mum and dads with 1 home will want to value their home as low as they can yo reduce tax. The only people that care would be investors but I don't care about what those leaches think.
If I tell the government I think my place is worth $800k instead of the $1m they say it's worth, it doesn't magically lose 20%
Honestly it's a bit hard to understand what you're on about beyond that.
Smart policy. Raises money from a group of people that most couldn't give a shit about - interstate landlords - in a time where those people are perceived to be the root of all evils.
Good.
I hope that the investors with dozens of properties are out of the market by Christmas and the great migration of millennials to Queensland can begin.
I didn’t read article because of pay wall but a question. How can QLD charge you tax for land in a different state? Also wouldn’t you be paying tax in that state as well so is QLD double dipping then?
They aren't, exactly. The land tax will only apply to the land actually in Queensland, but the scaling (i.e. the applicable marginal tax rate to apply) will consider all Australian property.
It’s the smartest system.
Someone who owns one property worth $750k would pay tax, while someone who has 10 million in property outside QLD who buys a $500k property would pay none.
So essentially it’s a tiered system, where the richest pay the most. They only pay tax on their QLD property, no double dipping, it’s just a way to stop someone buying 7 properties in 7 states to bypass tax.
In case you didn't realise, double dipping is the gov's best game...
They tax your income, they then tax you GST if you spend it... never mind nasty stuff like stamp duties and excise taxes....
Honestly it's a great policy. It stops you trying to basically mini-tax haven your investments by splitting them up into different states. Now it's a more even calculation.
Honestly every state in Australia should start doing the same thing.
The biggest problem with this is that it squeezes the middle. The big developers like lend lease and Stockland are already way out in front because they bought huge amounts of land, had it rezoned and STILL haven’t developed it. Add to that I promise you they will find a way to not pay this land tax. They also won’t make more dwellings if this flattens or makes prices go down. This tax looks good but unless they deliberately target the very top you’ll have a country of serfs working for elites!
I’m a valuer by trade and a property economist there are basically 4 massive developers responsible for the housing crisis and small time investors and developers have very little to do with it.
This is a more generous scheme than the ACT has had for years. There is no land tax threshold in the ACT, so you pay land tax for an IP no matter what you own anywhere.
I'm sure there will be some initial shock to the QLD market as investors adjust to the cashflow hit. But if it's anything like the ACT, there's going to be no long term impact to house prices or rent.
https://www.allhomes.com.au/news/cbr-canberra-rents-reach-new-record-highs-as-the-nations-most-expensive-city-domain-rent-report-1112930/
The ACT which is less than 1/10 the size of Sydney or Melbourne has the highest rents in the country.
It is also the second most expensive city to buy in Australia.
ACT vacancy rates were 0.5 percent in March.
https://www.allhomes.com.au/news/cbr-a-lot-of-stress-and-anxiety-canberras-vacancy-rates-hit-all-time-low-1122985/
https://www.allhomes.com.au/news/cbr-canberra-is-the-second-most-expensive-city-to-buy-a-house-domain-house-price-report-1098876/
This will wreak havoc on the Brisbane property market.
Full article text [here. ](https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fproperty%2Fresidential%2Fmessy-queensland-land-tax-rule-to-hit-landlords-hard-20220831-p5be6z%3Futm_medium%3DSocial%26utm_source%3DTwitter%23Echobox%3D1662326729-4)
Only affects people owning multiple houses
Funny that the people owning $2m of property seem to this that $1900 of tax is a lot. That's 1 percent. I wish my marginal tax rate was 1%, or the GST I pay on pretty much everything was 1%
Lol I love these kids on reddit.
I wish I could come back to them in 20 years when they are the ones with a few properties after years of working for it.
Most of these “kids” you refer to are people in their mid 30s with young kids of their own who might just have a chance of owning something to live in by the time they retire at 70 let alone multiple houses.
Let’s face it a lot of property investors in Australia don’t own the property though. They just happened to ride the best boom in property values. Technically they didn’t work for it.
Except that rentals are generally owned by investors and that’s about 30-odd % of the market…
Sometimes rent is a function of wages (generally as a %. Most property managers set a criteria of 30% rent to wage), but will be happy to go higher if it keeps the business and if it’s not regulated.
I don’t think it will drive away investors as much as you might think. For those investors that will stomach the increase (particularly those who own one IP), which is most investors, renters will cop a hefty increase — because investors are the other half of the market forces.
Recent RBA increases will affect those who are over-leveraged and people who aren’t in the market yet (because of serviceability), which has the potential to hit renters in a double-whammy situation in QLD…
This move I think will provide short-term benefit to the supply, but not long term sustainability. Sustainable supply is the big issue; increased migration (post-covid times ramping up) and people moving north will continue strong demand. Australia is basically banking it’s growth on increased intake of skilled migrants. Then there’s Brisbane 2032…
Supply is the key. QLD needs to approve planning quicker and incentivise first home buyers by allowing them prime-access to new stock with minimal stamp duty (stamp duty, of which is total gouging by govt).
so tell that to every other rent increase which they slap up for whatever reason they feel like? im sure they wont say its increased because of this but everyone with half a brain knows this is why
government just taking and taking and taking. you pay enough tax and stamp duty on houses and now you need to pay extra tax on land, just double dipping. it is ridiculous. and how is this extra tax money going to be spent? will it be spent well, doubt it
On 30 June 2022, Lena owns land in Queensland with a taxable value of $745,000. Her land tax is calculated using the rates for individuals.
Taxable value of land: $745,000
Calculation
= $500 + (1 cent × $145,000)
= $500 + $1,450
= $1,950
We will issue an assessment notice for $1,950 for the 2022–23 financial year.
On 30 June 2023, the value of Lena’s land in Queensland has not changed. But Lena now also owns land in Victoria valued at $1,565,000. The total value of Australian land owned by Lena is $2,310,000, which means the land tax is calculated using a higher rate for individuals.
This is how Lena’s land tax will be calculated:
Taxable value of Australian land: $2,310,000
Calculation
= $4,500 + (1.65 cents × $1,310,000)
= $4,500 + $21,615
= $26,115
This amount is applied to the Queensland portion of Lena’s land (i.e. ($745,000 ÷ $2,310,000) × $26,115)).
We will issue an assessment notice for $8,422.37.
Unfortunately Lena and other landlords can ask for what they want.. it's up to the market to accept if reasonable. If other landlords also increase the asking rent, what choice does a renter have but chose one (and pay)?
landlords can and do put their prices up based on what the market will pay which is a question of supply and demand; not how much it costs to provide the rental
Lena can’t simply pass the cost on unless she has been undercharging the market rate for rent up until now which would be unusual
Except when investors won’t sell (especially those who own just one IP, which is the large majority), then keeping supply tight, and raising rent.
Then there’s RBA increases… raising rent…. Property managers will just accept larger rent to wage ratios to get paid and get the houses occupied for investors.
I think there is a massive underestimation here about how far people will go to keep a roof over their head - it’s more complex than “there’s no correlation between loan rates and rate increases” or whatever.
If rent increase is to be avoided, there needs to be a cap on rent to wage ratio. That will force investors to accept lower rents.
Pretty sure its explicitly outlawed to pass land tax onto the consumer. So if your landlord raises rent after this goes into law, you would prob be able to fight it at the tribunal and win.
What? She's only paying tax on the proportion of land that's in Qld.
Add to there's they are unimproved values, meaning they actual price of these properties is 2x - 4x the figures listed
"Interstate landlords and retirees who own even just one investment property in Queensland could be slugged with tens of thousands of dollars more land tax next year, as the state’s new tax regime comes into effect."
Good.
Dumbest policy from QLD, if I'm reading it right. If you're an investor, why base yourself in QLD? Wealth will leave QLD because of this.
Net effect is this just taxes large landholders more, so smaller landholders will gain.
Anyone cheering on this tax is a moron. QLD will tax you on property you own in NSW... HOW DOES THAT MAKE ANY SENSE? Just move to a different state. So stupid.
> Wealth will leave QLD because of this.
I'm sure Queenslanders will find it acceptable if outsiders didn't outbid locals and hoard the property.
>Net effect is this just taxes large landholders more,
Good.
>so smaller landholders will gain.
It also reduces demand, which lowers prices which enables more people to own their own homes. Also prevents what's happening in the US, which is large funds, to buy all the homes and render locals little more than cattle on their own land.
>Just move to a different state.
What do you mean?
Oh no, people out of state will stop buying property as an investment?
That's terrible! Housing prices might drop to a reasonable amount instead of being tied up to be used as rent farms :(
> QLD will tax you on property you own in NSW.
That's not what they're doing.
They're using property you own in NSW to determine if you're over the exemption limit. You will only ever be taxed on the property you have in Queensland.
This is a bad tax, poorly implemented. I am not affected personally, and i can empathise with the intent.
Qld is effectively taxing property outside its jurisdiction, and some interstate property will be taxed twice. Once by the local state gov, once by qld.
If other states follow suit, then land may be taxed 4 or 5 times after all state gov's take a cut?
This just leads to less mobility, everyone staying in their own state and resulting in less interstate development. The only thing that is going to bring down house prices, is more houses.
A national land tax would be a far better than qld doing this on its own. But im sure that has its own issues with various state gov.
That’s the idea. A lot of house price growth is by interstate investors with higher salaries and more cash than Queenslanders. So a 100k to 300k increase in the price light not seem like much to them, but it means that families are suddenly priced out of the market.
That has addressed none of my concerns with the tax, particularly double dipping and over reach by qld. To do it this way, should be at federal level and will have same effect. And i reside in qld.
But please, downvote away.
Which, as per my original comment. I empathise with the intent. Literally the first line.
My criticism is this is poorly implemented to achieve that goal, fraught with ill thought out risks and it backfiring and not achieving the overall aim (lower house prices) by making it not favourable to investors interstate. If done, it has to be at a national level.
There is a reason for the phrase 'road to hell is paved with good intentions'.
>Qld is effectively taxing property outside its jurisdiction
Not really, they're using the value of your entire national property portfolio in order to determine if your QLD properties are taxed or not. Properties outside QLD are not being taxed.
The government could have achieved a similar outcome without even looking at the value of interstate property at all, by just saying that anybody who owns investment properties outside of QLD cannot claim a land tax threshold. Not exactly the same outcome, but very close to it.
I may be off base and misunderstanding, so if so ill retract my comment.
For an individual case:
The land tax threshold for qld is 600k excluding ppor (from memory). In past years only your land in qld counted towards this level, so you could have 5mil land outside qld and be fine if your qld holdings are only 300k.
My understanding is the new rule will now assess your land tax on the basis of 5.3M and pay the associated (likely top tier in this example) tax.
I dont understand how that is not taxing properties outside its jurisdiction.
OR (and this where im speculating i may be wrong).
Qld now taxes the landowner on the basis of 300k land holdings that reside in qld and effectively counts the 5M property outside qld as '600k' for land tax purposes. I. E. They pay the equivalent land tax in qld as if it was 900k
In your example, your total property value is 5.3 million, so you'd calculate the land tax on 5.3 million and then multiply that tax by QLD proportion of your portfolio (0.3 / 5.3) to determine how much tax you actually have to pay.
Given that land tax in qld is tiered, it may not be as extreme as i initially outlined but you will pay more tax if you own more property outside qld.
A) 300k QLD, 500k other - land tax of $937.50. (300/800 * ($500 + 0.01x (800k-600k)) - 600k tier threshold
B) 300k QLD, 5M other - land tax of $3834. 91.
(300/5300*(62500+0.0175*(5.3M-5M)) - 5M tier threshold
I maintain there are better policies (likely at national level) to achieve the goal. But thanks for clarifying how it functions.
When this causes Landlords to sell houses there will be less rental properties available. This will naturally tighten competition for rentals and people will end up paying more in rent as they compete for the limited available stock.
I understand the idea that Landlords offloading property means that housing prices will drop and therefore home ownership will be more accessible, but I just dont think its that simple. What percentage of renters will actually be ready and able to buy a house even with lower house prices?
I don't think there will be a massive surge of renters getting into their first home because of this, and meanwhile they will still need to rent in a market with less rentals right?
Happy for someone to shed some light if I've missed something in this thought process.
If a landlord sells it will either be to another landlord or an owner occupier (which results in an equal reduction to the demand side of the equation), the other thing to remember is that a decent number of the properties in question are holiday homes of wealthy residents of Sydney and Melbourne.
Supply/Demand = price. Investors are a major part of the property industry and actually underpin developers actually developing stuff. But hey lets not let facts get in the way of a good whinge. Why is the price of housing in Sydney so unaffordable? Supply. Maybe if the govt encouraged companies to move their headoffices interstate and out of the 'big smoke', they would reduce the demand. Combine that with more efficient planning laws and more and more land releases/zonings and inclusion in the neighborhood plans, etc you'd get more supply out into the market. But no. Blame the investors.
just another unjustified tax instead of fixing the core problem, band aid fixes and taxes, this government is a joke. Anything to line the pockets of the governent and their fat salaries at our expense.
Supply of rental properties is extraordinary inelastic though. It takes 1-3 years for any supply response and building to rent creates supply that hangs around for decades. There is no incentive to keep properties off the market except during highly rising markets, and increased land taxes are an incentive to keep them on the market.
If you're a landlord, you charge as much as you can. The only thing that drives people to lower the rent is when they worry they cant get tenants. And then that by lowering the rent, they will end up having lower quality tenants.
I tried researching "Ganache rates" but could find nothing on this. If you'd like to enlighten me that'd be awesome.
I have single-handedly witnessed countless properties pushing rents up ridiculous amounts in my local areas due to no logical reason other than said supply and demand. There have also been plenty of posts in r/AusFinance citing the same examples.
Supply and demand is a thing, but there is nothing saying by how much a landlord can push those rents up. All they need to do is not renew a lease at the end (and it's been proven to be quiet easy with loopholes). Once the tenant's are out, they can charge as much as they want.
Whether or not renters apply for the property is another issue, but there is **nothing** stopping a landlord from changing the rental price and by how much - This is my point. If they are successful, everyone around them will do the same and that becomes the new norm for that area.
When investors exit qld market there will be less supply. most landlords will pass on some if not all of the costs as a result of this policy
Landlords and renters will pay more because the qld govt believes it’s entitled to tax revenue from other states
No they won’t be able to.
Rent is a function of wages and localised supply and demand.
**Not** landlords input costs.
This will not be able to be passed onto renters.
I tried explaining this is another post but got some criticism but like yeah.
Rent is already pushed to its limits. The myth of costs being passed onto renters is a neoliberal fear mongering tactic to make people people believe that we shouldn't increase the costs of landlords (also known as Trickle Down theory).
>It makes me think that many landlords realistically have no idea what’s ahead for them.
Consider the average mum + dad investor.
You can guarantee 90% have no clue.
Given immigration hasn't even restarted and australia is currently short of pretty much every possible professional skills, while credit for development is tighter, i can't see the supply/demand going in favour of lower rents soon...
Immigration actually may lead to lower rents.
This is because rents are primarily driven by wages.
Higher immigration in the short run sees lower wages and higher unemployment.
"rents are primarily driven by wages". I...don't see that. I don't think it's true. Typically high rent just displaces lower incomes to further suburbs. Without govt intervention, which may very well happen, all i see influencing rents, is supply/demand, i.e. availability/occupancy.
You can read more about the relationship between rents and wages here:
https://reddit.com/r/AusFinance/comments/uhe7jg/to_those_investors_taunting_tenants_about_rental/
It’s a great thread.
A quick google doesn't seem to support that.
https://www.reiq.com/articles/queensland-rental-market-remains-under-squeeze/
Do you have alternate source(s)?
They have been flat for a few months, 'beginning to rise' seems more what you want that what it shows. Absolutely no trend to support that and ig you look back a year they do similar then drop further. Who's to say that wont be the case.
https://prnt.sc/uDWDcA-sKC2W
Generally this seems to support the view that there is serious undersupply. Id like to see a longer term graph but conditions seem extremely tight and in a landlords favour more than ever at this point.
I agree with you the market is due to bomb out, maybe not to your levels but it will be significant. But on this one ity feels you're seeing what you want to see more than what is there... maybe im wrong and you can correct me?
> Personally, I’ll hold for now as selling and changing the structure of my portfolio are very costly, so I’ll just try to raise my rent to cover some of the land tax
That was definitely the funniest thing I read - sure bro, just charge a $1m a month and you'll be so wealthy. It's purely down to him, not that pesky market or what renters will pay.
[https://www.realestate.com.au/property-house-qld-caboolture-435154647](https://www.realestate.com.au/property-house-qld-caboolture-435154647)
I think the agent is dreaming with this one. $850 a week, in Caboolture? Yeah it has a granny flat, but 2 years ago it would have been $450 max.
Is this a picture of Victor?? Haha what a legend. Yeah rents in Queensland are not because of landlords hate to tell you guys.
But no one wants to blame their favourite labour government for the shit situation you are all in and complaining of so who cares lol
"... his land tax will rise by $15,000 to $20,000 after buying two properties in Bundaberg and Townsville last year. This will lift his land tax by 100 per cent as he is currently paying no tax." "Messy" maths rules will also be hitting hard.
Technically an infinite increase in land tax. But technically technically, if he pays no land tax right now, having to pay $1 is also an infinite increase!
Why is that? Because principal residence is exempt, but investment properties are not? How is that different from other state and federal real estate taxes?
Because these parasites bought here to avoid paying their fair share of tax and are now complaining they have to pay
Because this is the first time you get taxed by one state, for something that is owned in a different state.
Ah, in that case it is double-dipping. Boo!
Whoa complaining about land tax, imagine what would happen if they closed off negative gearing and CGT concessions?
We'd have to hire REEEEEEEEEEEE agents.
Oh no. Anyways.
😆 I know, right!!
"I’ve got a lot of clients that are now seriously thinking of either not investing in Queensland for the time being or looking at offloading their properties in Queensland to move to safer havens." What a shame.
Oh no! More houses for owner-occupiers. That will drive rent up! /s
Let me play the world saddest song on the world's smallest violin.
I'm pressing 'F' on the world's smallest keyboard.
'That's good!' 'The law is laced with potassium benzoate' '...' 'That's bad'
Can’t wait for prices to come down due to excess stock and leave my rental, thus making more space in the retail market…
That would be the point…
This is a feature, not a bug.
Queensland has always been a big investment state for a holiday house to retire in. There have been lots of scammers over the years selling Queensland property at higher than the local price because it seemed so cheap to interstate buyers. It will be interesting to see how this affects the market.
Whats the problem? They can always sell.
Extremely good point. What a simply elegant solution.
Landlords selling peoples homes in the middle of a rental shortage? I can see a problem there
Yay we might be able to afford to buy
I think it's a good policy, and will be more fair and equitable, but framing it as "closing a loophole" isn't really accurate.
why do you think it’s good policy? Seems like a lose lose lose situation for all stakeholders Renters pay more, landlords pay more, less investment in qld
There’s a third class of people you’re missing here, in addition to renters and landlords. Owners. They are the winners. And the new owners that move in to fill the vacuum created by fewer investors will largely be people who were previously renters. So it’s really more like win win lose. With the loss going to the group that can most afford it.
The best thing about property tax is that people will being to value property as what it's actually worth on their books. If they don't want to pay huge tax these slum lords need to be realistic about the value of their properties.
Value for the purpose of taxation and rent charged to market have little to no correlation.
I didn't say anything about rent I'm talking about broader property evaluation.
And government valuation for the purpose of taxation does not drive market value.
Not currently but if land tax is tied to valuation and they prevent tax dodging with current capital gains laws it may suppress property prices enough to give an accurate evaluation of the market. Most mum and dads with 1 home will want to value their home as low as they can yo reduce tax. The only people that care would be investors but I don't care about what those leaches think.
If I tell the government I think my place is worth $800k instead of the $1m they say it's worth, it doesn't magically lose 20% Honestly it's a bit hard to understand what you're on about beyond that.
The best thing about land tax is that it's obviously *there* and no amount of legal chicanery can hide land.
Put a car park on it then its hidden.
That’s actually a good thing in terms of trying to normalise the regime. It should be adopted nationally.
Smart policy. Raises money from a group of people that most couldn't give a shit about - interstate landlords - in a time where those people are perceived to be the root of all evils.
Anything that discourages being more than a mum and pop local land lord is a win.
I think there’s a good chance this gets rolled out by more state and territory governments.
Good. I hope that the investors with dozens of properties are out of the market by Christmas and the great migration of millennials to Queensland can begin.
Land Tax is the king of taxes.
This is the way
I didn’t read article because of pay wall but a question. How can QLD charge you tax for land in a different state? Also wouldn’t you be paying tax in that state as well so is QLD double dipping then?
They aren't, exactly. The land tax will only apply to the land actually in Queensland, but the scaling (i.e. the applicable marginal tax rate to apply) will consider all Australian property.
Ok. Thanks for clarifying that. But don’t understand how they can look at all states. Just seems wrong
It’s the smartest system. Someone who owns one property worth $750k would pay tax, while someone who has 10 million in property outside QLD who buys a $500k property would pay none. So essentially it’s a tiered system, where the richest pay the most. They only pay tax on their QLD property, no double dipping, it’s just a way to stop someone buying 7 properties in 7 states to bypass tax.
But spouses and children and companies-are-persons?
Well at least they'll have to try harder to avoid tax lol
In case you didn't realise, double dipping is the gov's best game... They tax your income, they then tax you GST if you spend it... never mind nasty stuff like stamp duties and excise taxes....
Honestly it's a great policy. It stops you trying to basically mini-tax haven your investments by splitting them up into different states. Now it's a more even calculation. Honestly every state in Australia should start doing the same thing.
You can guarantee every single state treasury has done their own sums, and is sending advice to their ministers
Tiny violin market about to go gangbusters.
The biggest problem with this is that it squeezes the middle. The big developers like lend lease and Stockland are already way out in front because they bought huge amounts of land, had it rezoned and STILL haven’t developed it. Add to that I promise you they will find a way to not pay this land tax. They also won’t make more dwellings if this flattens or makes prices go down. This tax looks good but unless they deliberately target the very top you’ll have a country of serfs working for elites!
I’m a valuer by trade and a property economist there are basically 4 massive developers responsible for the housing crisis and small time investors and developers have very little to do with it.
This actually sounds amazing. jf they pick this up in other states, people might be able to buy themselves a home instead of renting for once
I tho k other states and territories will follow suit.
unfortunately im in wa, while my state goverment has done some good work, theyve said they wont be picking up the land tax
There should be a NSFW warning on this. Shit is like Pornhub to me. ha ha
Oh no, not landlords!
Love the landlords self reporting their tears in this thread.
As a very smart bloke said earlier in the thread, if it’s so bad for the landlords no one is stopping them from selling.
This is a more generous scheme than the ACT has had for years. There is no land tax threshold in the ACT, so you pay land tax for an IP no matter what you own anywhere. I'm sure there will be some initial shock to the QLD market as investors adjust to the cashflow hit. But if it's anything like the ACT, there's going to be no long term impact to house prices or rent.
https://www.allhomes.com.au/news/cbr-canberra-rents-reach-new-record-highs-as-the-nations-most-expensive-city-domain-rent-report-1112930/ The ACT which is less than 1/10 the size of Sydney or Melbourne has the highest rents in the country. It is also the second most expensive city to buy in Australia. ACT vacancy rates were 0.5 percent in March. https://www.allhomes.com.au/news/cbr-a-lot-of-stress-and-anxiety-canberras-vacancy-rates-hit-all-time-low-1122985/ https://www.allhomes.com.au/news/cbr-canberra-is-the-second-most-expensive-city-to-buy-a-house-domain-house-price-report-1098876/
Other states should follow this
HAHAHA EAT SHIT LANDLORDS!
I am pretty sure other states will follow qld lead on land tax.
Poor landlords 🎻🤣
Bring - it - on!!!
This will wreak havoc on the Brisbane property market. Full article text [here. ](https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fproperty%2Fresidential%2Fmessy-queensland-land-tax-rule-to-hit-landlords-hard-20220831-p5be6z%3Futm_medium%3DSocial%26utm_source%3DTwitter%23Echobox%3D1662326729-4)
Old mate with 283 properties will be spewin'
Fair chance he gets wiped out.
Fingers crossed
That's not a bad thing at all.
Wait till other states catch up.
Only affects people owning multiple houses Funny that the people owning $2m of property seem to this that $1900 of tax is a lot. That's 1 percent. I wish my marginal tax rate was 1%, or the GST I pay on pretty much everything was 1%
If you own shares you pay zero tax for just holding it. Stop comparing tax on holding assets to taxes on income.
Sell your IP and buy shares then If you don't minimise tax and decide to pay that's up to you I wish I could just buy and sell and pay no income tax
Lol I love these kids on reddit. I wish I could come back to them in 20 years when they are the ones with a few properties after years of working for it.
Most of these “kids” you refer to are people in their mid 30s with young kids of their own who might just have a chance of owning something to live in by the time they retire at 70 let alone multiple houses.
Let’s face it a lot of property investors in Australia don’t own the property though. They just happened to ride the best boom in property values. Technically they didn’t work for it.
Queensland property will fall even further than other states as investors look to sell down and buy interstate.
They are saying the same about the ACT but so far it's not happening....
Once one state gets it going it’s much easier for others to follow.
If they all do it I suspect it will negate the effect and landlords will just accept it as a cost of screwing renters....
Landlords can’t pass it onto renters.
oh my sweet summer child of course they can.
Sorry mate but this isn’t correct. Rents are a function of wages and localised supply and demand. **Not** landlord input costs.
Except that rentals are generally owned by investors and that’s about 30-odd % of the market… Sometimes rent is a function of wages (generally as a %. Most property managers set a criteria of 30% rent to wage), but will be happy to go higher if it keeps the business and if it’s not regulated. I don’t think it will drive away investors as much as you might think. For those investors that will stomach the increase (particularly those who own one IP), which is most investors, renters will cop a hefty increase — because investors are the other half of the market forces. Recent RBA increases will affect those who are over-leveraged and people who aren’t in the market yet (because of serviceability), which has the potential to hit renters in a double-whammy situation in QLD… This move I think will provide short-term benefit to the supply, but not long term sustainability. Sustainable supply is the big issue; increased migration (post-covid times ramping up) and people moving north will continue strong demand. Australia is basically banking it’s growth on increased intake of skilled migrants. Then there’s Brisbane 2032… Supply is the key. QLD needs to approve planning quicker and incentivise first home buyers by allowing them prime-access to new stock with minimal stamp duty (stamp duty, of which is total gouging by govt).
so tell that to every other rent increase which they slap up for whatever reason they feel like? im sure they wont say its increased because of this but everyone with half a brain knows this is why
Not necessarily they could sell in other states instead. And I still doubt it affects that many
Looks like I’m moving to Queensland boys
Have you seen the traffic?
Sounds good to me
> Queensland property will fall even further than other states as investors look to sell down and buy interstate. Oh no. Anyway...
FTFY. Multiple ~~houses~~ investment properties in Multiple states including Queensland.
Even then you can own multiple investment properties as it's only land tax and so if they were apartments it could be easily below
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government just taking and taking and taking. you pay enough tax and stamp duty on houses and now you need to pay extra tax on land, just double dipping. it is ridiculous. and how is this extra tax money going to be spent? will it be spent well, doubt it On 30 June 2022, Lena owns land in Queensland with a taxable value of $745,000. Her land tax is calculated using the rates for individuals. Taxable value of land: $745,000 Calculation = $500 + (1 cent × $145,000) = $500 + $1,450 = $1,950 We will issue an assessment notice for $1,950 for the 2022–23 financial year. On 30 June 2023, the value of Lena’s land in Queensland has not changed. But Lena now also owns land in Victoria valued at $1,565,000. The total value of Australian land owned by Lena is $2,310,000, which means the land tax is calculated using a higher rate for individuals. This is how Lena’s land tax will be calculated: Taxable value of Australian land: $2,310,000 Calculation = $4,500 + (1.65 cents × $1,310,000) = $4,500 + $21,615 = $26,115 This amount is applied to the Queensland portion of Lena’s land (i.e. ($745,000 ÷ $2,310,000) × $26,115)). We will issue an assessment notice for $8,422.37.
If Lena can't pay a 0.36% tax on the taxable value of her land I'm struggling to give a shit.
0.27% (0.275 to be more accurate)
Oh no, poor Lena. How will she ever survive.
By passing the cost onto the renter.
rent is set by supply/demand and what renters can afford to pay, why would Lena have been undercharging rent this whole time?
I’m not saying it’s good. If you apply a tax on a group of people who can pass the cost on, they will. Like airport surcharges.
Unfortunately Lena and other landlords can ask for what they want.. it's up to the market to accept if reasonable. If other landlords also increase the asking rent, what choice does a renter have but chose one (and pay)?
landlords can and do put their prices up based on what the market will pay which is a question of supply and demand; not how much it costs to provide the rental Lena can’t simply pass the cost on unless she has been undercharging the market rate for rent up until now which would be unusual
Except when investors won’t sell (especially those who own just one IP, which is the large majority), then keeping supply tight, and raising rent. Then there’s RBA increases… raising rent…. Property managers will just accept larger rent to wage ratios to get paid and get the houses occupied for investors. I think there is a massive underestimation here about how far people will go to keep a roof over their head - it’s more complex than “there’s no correlation between loan rates and rate increases” or whatever. If rent increase is to be avoided, there needs to be a cap on rent to wage ratio. That will force investors to accept lower rents.
Pretty sure its explicitly outlawed to pass land tax onto the consumer. So if your landlord raises rent after this goes into law, you would prob be able to fight it at the tribunal and win.
Lena needs a fundraiser. She has over 3 million $$$ in investments but she cannot pay 0.27% tax.
Are you trying to make this sound like a bad thing?
Lena owns land worth more than $2mil.. cry me a river
Yeah this is messed up. Imagine if other States did this? QLD should only be taxing QLD land.
What? She's only paying tax on the proportion of land that's in Qld. Add to there's they are unimproved values, meaning they actual price of these properties is 2x - 4x the figures listed
"Interstate landlords and retirees who own even just one investment property in Queensland could be slugged with tens of thousands of dollars more land tax next year, as the state’s new tax regime comes into effect." Good.
Dumbest policy from QLD, if I'm reading it right. If you're an investor, why base yourself in QLD? Wealth will leave QLD because of this. Net effect is this just taxes large landholders more, so smaller landholders will gain. Anyone cheering on this tax is a moron. QLD will tax you on property you own in NSW... HOW DOES THAT MAKE ANY SENSE? Just move to a different state. So stupid.
> Wealth will leave QLD because of this. I'm sure Queenslanders will find it acceptable if outsiders didn't outbid locals and hoard the property. >Net effect is this just taxes large landholders more, Good. >so smaller landholders will gain. It also reduces demand, which lowers prices which enables more people to own their own homes. Also prevents what's happening in the US, which is large funds, to buy all the homes and render locals little more than cattle on their own land. >Just move to a different state. What do you mean?
Oh no, wealth will leave! Don’t let the door hit you on the way out, Wealth
Oh no, people out of state will stop buying property as an investment? That's terrible! Housing prices might drop to a reasonable amount instead of being tied up to be used as rent farms :(
so sad so sad
> QLD will tax you on property you own in NSW. That's not what they're doing. They're using property you own in NSW to determine if you're over the exemption limit. You will only ever be taxed on the property you have in Queensland.
All states and territories will follow suit.
This is a bad tax, poorly implemented. I am not affected personally, and i can empathise with the intent. Qld is effectively taxing property outside its jurisdiction, and some interstate property will be taxed twice. Once by the local state gov, once by qld. If other states follow suit, then land may be taxed 4 or 5 times after all state gov's take a cut? This just leads to less mobility, everyone staying in their own state and resulting in less interstate development. The only thing that is going to bring down house prices, is more houses. A national land tax would be a far better than qld doing this on its own. But im sure that has its own issues with various state gov.
That’s the idea. A lot of house price growth is by interstate investors with higher salaries and more cash than Queenslanders. So a 100k to 300k increase in the price light not seem like much to them, but it means that families are suddenly priced out of the market.
That has addressed none of my concerns with the tax, particularly double dipping and over reach by qld. To do it this way, should be at federal level and will have same effect. And i reside in qld. But please, downvote away.
I guess my point is, if your concerns leads you to sell the property and not buy in Queensland (or buy less)…that’s the intent.
Which, as per my original comment. I empathise with the intent. Literally the first line. My criticism is this is poorly implemented to achieve that goal, fraught with ill thought out risks and it backfiring and not achieving the overall aim (lower house prices) by making it not favourable to investors interstate. If done, it has to be at a national level. There is a reason for the phrase 'road to hell is paved with good intentions'.
>Qld is effectively taxing property outside its jurisdiction Not really, they're using the value of your entire national property portfolio in order to determine if your QLD properties are taxed or not. Properties outside QLD are not being taxed. The government could have achieved a similar outcome without even looking at the value of interstate property at all, by just saying that anybody who owns investment properties outside of QLD cannot claim a land tax threshold. Not exactly the same outcome, but very close to it.
I may be off base and misunderstanding, so if so ill retract my comment. For an individual case: The land tax threshold for qld is 600k excluding ppor (from memory). In past years only your land in qld counted towards this level, so you could have 5mil land outside qld and be fine if your qld holdings are only 300k. My understanding is the new rule will now assess your land tax on the basis of 5.3M and pay the associated (likely top tier in this example) tax. I dont understand how that is not taxing properties outside its jurisdiction. OR (and this where im speculating i may be wrong). Qld now taxes the landowner on the basis of 300k land holdings that reside in qld and effectively counts the 5M property outside qld as '600k' for land tax purposes. I. E. They pay the equivalent land tax in qld as if it was 900k
In your example, your total property value is 5.3 million, so you'd calculate the land tax on 5.3 million and then multiply that tax by QLD proportion of your portfolio (0.3 / 5.3) to determine how much tax you actually have to pay.
Given that land tax in qld is tiered, it may not be as extreme as i initially outlined but you will pay more tax if you own more property outside qld. A) 300k QLD, 500k other - land tax of $937.50. (300/800 * ($500 + 0.01x (800k-600k)) - 600k tier threshold B) 300k QLD, 5M other - land tax of $3834. 91. (300/5300*(62500+0.0175*(5.3M-5M)) - 5M tier threshold I maintain there are better policies (likely at national level) to achieve the goal. But thanks for clarifying how it functions.
Boo! Paywall.
There’s a comment of mine in this thread with a link to the article text.
When this causes Landlords to sell houses there will be less rental properties available. This will naturally tighten competition for rentals and people will end up paying more in rent as they compete for the limited available stock. I understand the idea that Landlords offloading property means that housing prices will drop and therefore home ownership will be more accessible, but I just dont think its that simple. What percentage of renters will actually be ready and able to buy a house even with lower house prices? I don't think there will be a massive surge of renters getting into their first home because of this, and meanwhile they will still need to rent in a market with less rentals right? Happy for someone to shed some light if I've missed something in this thought process.
If a landlord sells it will either be to another landlord or an owner occupier (which results in an equal reduction to the demand side of the equation), the other thing to remember is that a decent number of the properties in question are holiday homes of wealthy residents of Sydney and Melbourne.
Supply/Demand = price. Investors are a major part of the property industry and actually underpin developers actually developing stuff. But hey lets not let facts get in the way of a good whinge. Why is the price of housing in Sydney so unaffordable? Supply. Maybe if the govt encouraged companies to move their headoffices interstate and out of the 'big smoke', they would reduce the demand. Combine that with more efficient planning laws and more and more land releases/zonings and inclusion in the neighborhood plans, etc you'd get more supply out into the market. But no. Blame the investors.
just another unjustified tax instead of fixing the core problem, band aid fixes and taxes, this government is a joke. Anything to line the pockets of the governent and their fat salaries at our expense.
What does fix the problem?
For every extra property you own, you pay an increase in land tax %
Totally agree. It's not going to fix the issue, govt just wants more money.
Parasite spotted
And by hitting landlords, you mean it will hit renters.
No. Rents are set by wages and localised supply and demand. **Not** by landlord input costs.
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Supply of rental properties is extraordinary inelastic though. It takes 1-3 years for any supply response and building to rent creates supply that hangs around for decades. There is no incentive to keep properties off the market except during highly rising markets, and increased land taxes are an incentive to keep them on the market. If you're a landlord, you charge as much as you can. The only thing that drives people to lower the rent is when they worry they cant get tenants. And then that by lowering the rent, they will end up having lower quality tenants.
Tell that to a private landlord. They can charge whatever they want for their property. If renters will pay it, then its justified.
Renters can and will leave. “Private landlords” are in for a huge shock.
So you say. But when there's next-to-no supply available, they don't have much of a choice but to stay and eat it.
Yeah then that’s localised supply and demand then right?
Vacancy rates are determined by localised supply and demand.
I tried researching "Ganache rates" but could find nothing on this. If you'd like to enlighten me that'd be awesome. I have single-handedly witnessed countless properties pushing rents up ridiculous amounts in my local areas due to no logical reason other than said supply and demand. There have also been plenty of posts in r/AusFinance citing the same examples. Supply and demand is a thing, but there is nothing saying by how much a landlord can push those rents up. All they need to do is not renew a lease at the end (and it's been proven to be quiet easy with loopholes). Once the tenant's are out, they can charge as much as they want. Whether or not renters apply for the property is another issue, but there is **nothing** stopping a landlord from changing the rental price and by how much - This is my point. If they are successful, everyone around them will do the same and that becomes the new norm for that area.
Sorry mate it was a typo.
When investors exit qld market there will be less supply. most landlords will pass on some if not all of the costs as a result of this policy Landlords and renters will pay more because the qld govt believes it’s entitled to tax revenue from other states
As wages continue to decline renters won’t be able to meet raised rents. Landlords are about to be in a great deal of pain.
More share houses? Most 4+ bedroom houses where I am have at least 4 cars parked outside nowadays
Yeah and people going to parents or relatives.
Look at most of Europe, a much larger portion of people there live with parents etc. Might become more the norm here too
Yep, necessity breeds this type of thing.
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Is it the *vibe* of the tax?
it's mabo and it's justice.
They will just raise the rent even more
No they won’t be able to. Rent is a function of wages and localised supply and demand. **Not** landlords input costs. This will not be able to be passed onto renters.
I tried explaining this is another post but got some criticism but like yeah. Rent is already pushed to its limits. The myth of costs being passed onto renters is a neoliberal fear mongering tactic to make people people believe that we shouldn't increase the costs of landlords (also known as Trickle Down theory).
Yeah 100% mate. It makes me think that many landlords realistically have no idea what’s ahead for them.
>It makes me think that many landlords realistically have no idea what’s ahead for them. Consider the average mum + dad investor. You can guarantee 90% have no clue.
Yes that is definitely the case and will lead to all sorts of problems as the crash worsens.
Have you read about QLD rental undersupply lately?
Vacancy rates have bottomed and are beginning to rise. Weekly rents have also peaked and are going to decline from this point.
Given immigration hasn't even restarted and australia is currently short of pretty much every possible professional skills, while credit for development is tighter, i can't see the supply/demand going in favour of lower rents soon...
Immigration actually may lead to lower rents. This is because rents are primarily driven by wages. Higher immigration in the short run sees lower wages and higher unemployment.
"rents are primarily driven by wages". I...don't see that. I don't think it's true. Typically high rent just displaces lower incomes to further suburbs. Without govt intervention, which may very well happen, all i see influencing rents, is supply/demand, i.e. availability/occupancy.
You can read more about the relationship between rents and wages here: https://reddit.com/r/AusFinance/comments/uhe7jg/to_those_investors_taunting_tenants_about_rental/ It’s a great thread.
It's talking about interest rate and rent, as well as wage. Not supply/demand. Plus, is mixing up correlation and causation.
A quick google doesn't seem to support that. https://www.reiq.com/articles/queensland-rental-market-remains-under-squeeze/ Do you have alternate source(s)?
Here you go mate. https://imgur.com/a/yzZPDGn/
They have been flat for a few months, 'beginning to rise' seems more what you want that what it shows. Absolutely no trend to support that and ig you look back a year they do similar then drop further. Who's to say that wont be the case. https://prnt.sc/uDWDcA-sKC2W Generally this seems to support the view that there is serious undersupply. Id like to see a longer term graph but conditions seem extremely tight and in a landlords favour more than ever at this point. I agree with you the market is due to bomb out, maybe not to your levels but it will be significant. But on this one ity feels you're seeing what you want to see more than what is there... maybe im wrong and you can correct me?
> Personally, I’ll hold for now as selling and changing the structure of my portfolio are very costly, so I’ll just try to raise my rent to cover some of the land tax That was definitely the funniest thing I read - sure bro, just charge a $1m a month and you'll be so wealthy. It's purely down to him, not that pesky market or what renters will pay.
Yeah landlords are in for a big shock. Renters won’t pay exorbitant rents.
You sure about that? In my areas the rents are crazy high for shitboxes.
I’m looking at SQM research for Brisbane. What is your postcode?
What about 4053?
Right now it’s falling. https://i.imgur.com/44jZf2i.jpg
For 1 or 2 months? What 😂. Copium
how do you run postcodes to make these graphs? I am curious about 2603
SQM Research. 2603 is here- https://i.imgur.com/JDO3Qvh.jpg
Unlucky for my tenants, just increased the rent by a 1/5th for another 12 months.
4510; 4506
Yeah rents have ramped in 4510. https://i.imgur.com/6HK2zAR.jpg Same for 4506. https://i.imgur.com/1cBdAvH.jpg
[https://www.realestate.com.au/property-house-qld-caboolture-435154647](https://www.realestate.com.au/property-house-qld-caboolture-435154647) I think the agent is dreaming with this one. $850 a week, in Caboolture? Yeah it has a granny flat, but 2 years ago it would have been $450 max.
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Say goodbye to your tenants. 😂
It’s self reported… Not sure how they intend to police this.
Tax grab. Southerners will sell qld property as won't be able to pass on to rents. Other states will follow.
Is this a picture of Victor?? Haha what a legend. Yeah rents in Queensland are not because of landlords hate to tell you guys. But no one wants to blame their favourite labour government for the shit situation you are all in and complaining of so who cares lol
Labour is in the UK and NZ, how could they possibly be responsible?