Property Talk – Shifts in state taxes

Queensland has backed down on a country wide land tax assessment

The QLD Government has taken a step back on an amendment to property tax that would see land tax rates on investment properties in QLD being assessed based on the value of owner’s land holdings Australia-wide from 1 July 2023, and not just based on the value of land holdings in just QLD. The amendment taking a step back passed Queensland Parliament and came into law on the 30th of June 2022.

The new amendment to property tax would have seen the overall value of the investors Australian land property assessed, QLD land tax being calculated based on Australia wide taxable investments and then allotted to the QLD part of the land. The amendment would have required landholders to declare any interstate landholdings as well as data from other sources to verify said landholdings. This assessment may mean property investors being pushed into a higher land tax rate.

The Bill specifies, “The land tax reform is intended to make Queensland’s land tax system fairer by addressing an inequity which can result in a landholder with all of their landholdings in Queensland paying more land tax than a landholder with a similar value of landholdings spread across jurisdictions.”

In response to the amendment, Premier Palaszczuk walked back on the reform as it relies on the goodwill of other states in Australia and that if we can’t get the additional information from other states’ she would put that aside.

If you need an accountant on the Gold Coast to help you to understand how this amendment might affect you get in touch with us.

NSW First home buyers – Annual property tax or stamp duty – buyers’ choice.

From the 16th of January 2023, first home buyers in NSW investing in property valued at up to $1.5m will have options in regards to their property taxes – whether to pay stamp duty or an annual property tax.

Annual property tax instalments will be based on the land value of the property being purchased. The tax rates on NSW property for 2022-23 are:

Lived in properties:
– $400 + 0.3% of land value

Investment properties:
– $1500 + 1.1% of land value

For buyers who take up the annual property tax option, tax assessments will be issued and indexed yearly to home buyers. To use an example, a first home buyer who purchases a $1.2m property in NSW with a land value of $720,000 could either pay:

Stamp Duty:

0r Annual Property Tax:
$2,560 for 2022-23

First home buyers purchasing property in NSW will be able to utilise the Annual Property Tax option for contracts signed on or after the 16th of January 2023. Being eligible for this option would mean that the purchaser needs to move into the property within 12 months of purchase and needs to live in the property continuously for at least 6 months in order to qualify.

Annual Property Tax is only applicable to the first home buyer. If the property goes on to be sold, the tax will not apply to the new owner of the property. To see if you are eligible to utilise this alternative to stamp duty, see the NSW Government website, First Home Buyer Choice section.

Eligible first home buyers who sign a contract between now and the 15th of January 2023 will be able to opt in to the new form of property tax. For these buyers in the property marked, they will pay stamp duty and will then be able to apply for a refund of said duty if they meet the eligibility criteria for Annual Property Tax.

If you need more information on how your property purchases would be taxed and need gold coast accounting services, contact the expert team at MB Accounting.