Australian States Move On Property Taxes
Queensland backs down on Australia wide land tax assessment:
The Queensland Government has withdrawn an amendment that would have taxed investment property based on the value of an investor’s Australia-wide land holdings. Instead, the revenue office will assess the land tax only on the value of the Queensland property.
The amendment passed the Queensland Parliament and became law on 30 June 2022.
It would see the value of all of the landholder’s Australian investment property assessed, the value of Queensland land tax calculated on taxable Australian wide investments, then apportioned to the Queensland portion of the land. The amendment requires the landholder to declare their interstate landholdings and data from other sources to verify the landholdings. The end result is many investors being tipped into a higher land tax rate.
Following the National Cabinet Meeting on 30 September, Premier Palaszczuk rescinded the reform as it relied on the ‘goodwill of other states, and if we can’t get that additional information, I will put that aside’.
Stamp duty or an annual property tax for NSW first home buyers?
First home buyers purchasing property in NSW of up to $1.5m will have a choice of paying:
- Stamp duty, or
- An annual property tax from 16 January 2023.
The annual property tax payments will be based on the land value of the purchased property.
The property tax rates for 2022-23 are:
- $400 plus 0.3% of land value for properties whose owners live in them
- $1,500 plus 1.1% of land value for investment properties.
The revenue office will issue property tax assessments annually to home buyers who take the annual property tax option. As an example, a first buyer purchases a $1.2m NSW property with a land tax value of $720,000. They could either pay stamp duty of $50,875 or opt to pay the annual property tax ($2,560 for 2022-23). The property tax rates will be indexed annually.
Eligible first home buyers who sign a contract of purchase on or after 16 January 2023 will be eligible to opt into the property tax. If first home buyers select the property tax option, they must move into the property within 12 months of purchase and live in it continuously for at least 6 months.
The annual property tax is only applicable to the purchaser. If the purchaser sells the property, the property tax does not apply to subsequent purchasers. For eligibility details, see First Home Buyer Choice on the NSW Government website.
The NSW Parliament are expected to pass this legislation enabling the property tax this month. If passed, eligible first home buyers who sign a contract of purchase between the passage of the legislation and 15 January 2023 will be eligible to opt into the property tax. These purchasers will pay land stamp duty but will be able to apply for and receive a refund.
For advice on any of these changes, contact your Aintree Group adviser today!
This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your accountant and lawyer.
