The 2001 revaluations of Brisbane CBD and fringe property, released by the Department of Natural Resources today, provide further evidence that legislation must be changed according to the Property Council of Australia.
The Property Council’s Vice President, Steven Leigh, who has led the Property Council’s dialogue with the Department said “Whilst the results for the Brisbane CBD are pleasing and represent a better understanding of commercial conditions in the CBD, the fringe has suffered from several one-off acquisitions in what is currently a hot residential development market.
“The problem is the legislation, and until the system is changed, property owners will continue to suffer from the anomalies created by one-off property sales.” Mr Leigh said.
In terms of the CBD result the Department has shown its “willingness to deal with practitioners and other market participants to gain a better understanding of commercial conditions in the CBD market”, however, he said there are now concerns for the impact of the results for fringe owners.
“It’s unacceptable that land values increase across the board, in some cases in excess of 75%, just because of a few hot property sales. We will continue to pressure the government to change the legislation and the system until a fairer more equitable and predictable system is established.”
Each year the Department of Natural Resources conducts revaluations of land to establish the current unimproved value, and the data is used by the Office of State Revenue and local government’s to levy land tax and local government rates.
“The accuracy of the unimproved valuations is critical,” Mr Leigh said, “and from what we have seen in relation to CBD revaluations, it would seem that the Department has taken a far more considered approach, particularly the core commercial precinct which last year experienced some unrealistic increases.”
Mr Leigh added that the Property Council was opposed to land tax, which under Queensland law could not be recovered by lessors as an outgoing cost, unlike other taxes and charges.
Land tax is essentially a wealth tax, having its origins in an era when wealth was typically represented by land ownership. As everyone knows, wealth now resides elsewhere in the capital markets, leaving the burden of this tax to a small number of land owners.
The increases in valuations will be particularly noticeable in the Brisbane residential market this year, with more and more ordinary property owners being required to pay land tax for the first time. The Property Council continues to urge the government to consider the future of land tax within the context of a broad review of state taxes and charges.