In the lead up to the State election, the Property Council of Australia has called on all political parties to commit to freezing planned land tax rises.
Property Council Queensland Executive Director, Steve Greenwood, said that land tax increases planned for September 2009 would see land tax bills skyrocket by around $250 million to over $1,000,000,000 – a massive increase of around 30%.
“Significantly increasing land tax at a time when property values are decreasing has the potential to create a ‘perfect storm’, dramatically devaluing Queensland property values over the next 12 months,” Mr Greenwood said.
“The failure of the government to revalue properties in 2008, combined with the proposed 0.5% land tax surcharge, will result in 2009 tax bills being far in excess of what they should be.
“There is clear and irrefutable evidence that the market has turned and is experiencing a downturn.
“With property values going down and vacancy rates going up, many property owners are finding themselves financially exposed as loan to value ratios are compromised.
“An increase in land tax will put further pressure on already falling property prices in the State, and Queenslanders are very likely to see a further drop in the value of their superannuation funds which are heavily invested in property.”
The property industry is a major contributor to the Queensland economy: employing over 300,000 people, generating around 14% of the gross state product and paying around 43% of the State’s taxes.
“If action is not taken, it is likely that there will be state-wide job losses from those companies forced to cut staff to pay their land tax bill - at a time when we should be protecting Queensland jobs.
“Queensland’s property industry is well-positioned to help Queensland weather the economic crisis, but the land tax issue needs addressing as a matter of urgency.
“The Property Council is calling on all political parties to commit to freezing land tax increases.” Mr Greenwood concluded.