Property owners suffering from increasing insurance premiums should brace themselves for even more setbacks following the State Budget announcement earlier today that Queensland companies and trusts would lose the 15 per cent general land tax rebate.
The changes to the rebate, combined with land valuation increases across the State, will take an extra $48 million from property owners – described as a "backwards step" by Property Council of Australia, Queensland Division’s Executive Director Robert Walker.
"This goes against the Government’s stated proposal to abolish land tax over the 10 years from 1996," Mr Walker said.
"As part of the planned phasing out of land tax we have seen three-year averaging introduced in 1996, followed by a 5 per cent land tax rebate in 1997, which was increased to 15 per cent in 1999, and increases in thresholds reducing the land tax burden.
"This proposal has in fact had a reverse effect."
Mr Walker said that increased revenue from the property sector did not result in increased benefits to the industry, with $500 million from stamp duty revenue being directed to reduce the budget deficit and another $400 million to be spent on a four-year "Priority Infrastructure Package".
Mr Walker suggested that income would be better used to reduce inefficient taxes and charges rather than "continuing to burden" what a Treasury report earlier this year identified as a "diminishing tax base".
"The Budget also fails to deliver on increases in capital expenditure, which this year is down to $4.8 billion, constituting less than 20 per cent of the overall Budget compared to around 42 per cent in the late 1980s - a period also recognised for its high growth and low unemployment," he said.
Mr Walker congratulated the State Government on its continued drive in recognising the role that public private partnerships can play in providing major infrastructure throughout the State. The Property Council has been working with the Government in developing the guidance material, which is expected to be released later this year.