Thursday, February 25, 2010
The Queensland state government has delayed the debate in parliament on its proposed changes to the state’s land tax laws following severe criticism, particularly from the Property Council of Australia (PCA).
The state government had hoped to propose the Valuation of Land Amendment Bill, but opposition mounted, particularly from business groups, against the sharp rises to land taxes and council rates that could have been seen as a result of the bill.
Queensland’s land tax is assessed on the taxable value of an owner's total land-holdings, with a landowner’s primary residence usually being eligible for an exemption or deduction. The taxable value is currently calculated on the “unimproved value” of land, but the new amendments would mean properties, while still being taxed on the value of the land, would also be taxed on any improvements by the owner, including goodwill, leases and profits.
The PCA's Executive Director in Queensland, Steve Greenwood, said: “With this new law, the Queensland government is rewriting the dictionary to change the meaning of unimproved capital value to include improvements.” The PCA has called the proposed legislation a “sneaky government tax grab” against Queensland families, small businesses, farmers and property investors.
Following confirmation that the debate in the state parliament had been delayed, the PCA said that it was a very welcome development and will allow the government time for further detailed investigation and for engagement with relevant industry representatives.
He pointed out that the PCA’s main concerns with the bill are threefold. Firstly, he said, “there is the issue of change in the definition of unimproved value, which is used to calculate land tax liabilities and council rates. The proposed changes, which deviate from 60 years of settled principle, would lead to very significant increases in land values across the state.”
“The second issue centres around the changes to the proposed objection and appeal process – which the PCA considers burdensome, overly prescriptive, constricting landowners appeal rights in a manner inconsistent with the principles of natural justice and particularly biased against ‘mum and dad’ investors.”
“The third issue is the retrospectivity of the amendments, removing the rights of 300 or so appellants who currently have cases before the Land Court, which are unjust and infringe on the rights of property owners to have the certainty to have their case heard based on the law of the day.”
“We now look forward to working with the Queensland government through the above issues,” he added. The PCA is convinced that, if the bill goes through unchanged, it would destroy property values and capital investment, and lead to massive job losses in the business and property sector.