Property Council fights Qld land tax grab

By: Graham Gardiner

Queensland’s Property Council is today lodging documents with the legislative review committee expressing its concern over the State Government’s proposed

Queensland’s Property Council is today lodging documents with the legislative review committee expressing its concern over the State Government’s proposed changes to land tax valuations.

The controversial legislation, which Property Council Executive Director Steve Greenwood says could be debated as early next week, is expected to have significant impact on the State’s commercial property owners.

"The changes will further inflate the unimproved value on property in Queensland and increase land taxes," Greenwood says.

"They will come on the back of a 70 percent increase in land tax bills the commercial property industry has faced over the last two years.

"Basically, the more you work the more you will get taxed."

Last Thursday (February 11) the Queensland Government introduced the Valuation of Land and Other Legislation Amendment Bill into parliament, following unsuccessful litigation with major shopping centre owners, including Pacific Fair on the Gold Coast.

According to Brisbane law firm, HopgoodGanim, the legislation will – among other things – redefine the meaning of unimproved land for commercial purpose by taking into account factors such as the value of leases, goodwill, infrastructure charges and entrepreneurial development profit.

This will result in increased land valuations and subsquent future bills.

Planning and Development Team Partner James Ireland says the inclusion of these previously excluded factors will certainly have a negative flow on effect to Queensland SMEs.

Ireland says it will hit the pocket of property owners, which includes investors of superannuation funds, and could also have an indirect impact on tenants through rent reviews.

"These tenants are the small businesses employing people…so the changes could lead to job losses," he says.

"The reduction in asset values will also make it harder for business to borrow money, as well as being a massive disincentive for people to invest in Queensland."

While the Government argues it is merely correcting previous practices, Greenwood says the bottom-line is the Government has was been caught out over its inflated valuations in the Pacific Fair case.

In this incidence, the unimproved value for Pacific Fair Shopping Centre was assessed at $47.5 million, whereas the State had contended for a number of different values in the Land Court, the highest being $255 million.

"They [the Queensland Government] have been caught out doing the wrong thing for the past 8 years," Greenwood says. "Their response is to now change the law."

In introducing the Bill, the Government is also trying to make the changes retrospective (dating back to 2002), meaning cases like Pacific Fair will be overturned.

"It is a sneaky and tricky move by the Government," Greenwood says.

In retaliation, the Property Council has launched a ‘fighting against the land tax grab’ campaign, which Greenwood says will hopefully delay debate on the legislation, and allow them time to prevent the Bill being passed.

"We have strong concern over the changes," he says.

"If the Bill is passed by the Queensland Government, it will be a disaster for the property industry."

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