Queensland Land Tax & Absentee Surcharge affects all Queenslanders

Hello,

An article was recently published in the Brisbane Times titled, "I would never have invested into Queensland property" dated 18 July 2018 by political reporter Felicity Caldwell - please look it up online. I have also set up a Facebook Page support group for all victims of the Absentee Surcharge to join (Search for "Queensland Land Tax & Absentee Surcharge victims"). it is hoped that the more that join the cause will help enough to then lobby the government for change. There are grounds for it being unconstitutional.

What unfortunately was not clearly revealed in the QLD 2017 Budget was the far reaching impact this new set of laws would have upon Queenslander home owners and property owner/investors - all whom are Australian citizens. Yes, that's right - the Treasurer at the time Curtis Pitt conveniently glossed over a lot of details and hoodwinked many who listened on that it was only relevant for foreign investors. Not so. Australian citizens were surreptitiously included in the legislation.

This carried on to media reporting as well, many of which failed to realise that the Land Tax (ramped up to a tax free threshold corporate rate for absentees) and Absentee Surcharge at 1.5% as well is to be applied under the new QLD Land Tax Act - to all Australians owning property in Queensland who stay out of Australia for more than a day over 6 months in a financial year.

There is but a small exemption for those who work in an approved government occupation or who are on an approved employment overseas from a company from which they have worked for, for a least one year already. So do not listen to the Labor Government exclaiming that there are exemptions! it only applies to a very small percentage of people.

The devil is in the details and a year on many home owners in Queensland are now discovering they too are impacted. Many are then faced with a shocking bill they were not prepared for.

Who is really affected? Many are. Examples are:

* Self funded retirees holding property (usually investment for rental income) who spend more than 6 months of a year overseas - residing or travelling in another country

* Dual citizens who may spend time overseas with their families/relatives - life can be complex

* Pensioners/retirees who had planned to take their long deserved retirement vacation dream - maybe to travel to the world, spend time with relatives of friends not seen for a long time - their dream trip has just got a hell of lot more expensive

* Aussies who have been offered employment overseas - perhaps to further their careers, on a contract basis for a year etc - whilst deciding to hold their Queensland home so they have something to come back to.

* People who are taking a career break or gap year to travel overseas - imagine pre-booking trips and overseas arrangements just before the budget! Remember - this was retrospective!

* People who had booked trips less than the 6 month threshold but have suffered a medical emergency that deems them no fit to fly home - stranded in a hospital or in respite care or rehabilitation - but in the meantime they now are over the 6 month curfew. (There is NO exemption for this and my discussions with the Treasury Office of State Revenue have declared this - very cruel eh?)

* Aussies working overseas who have reinvested back money made in another country - back into Queensland property - now being lugged these taxes when they are contributing to the QLD economy!

The standard response from QLD Labor is words to the effect that it ensures that absentees are making their fair contribution to infrastructure, QLD economy etc. Yet again this is lie. The reality is this set of taxes are unfair. Property investors for example already pay income tax (and if they are deemed permanent non-residents there is no tax-free threshold either - hence paying more tax and contributing already), holding property entails paying Council Rates, Water Rates, property management fees from agents, Letting fees, Advertising fees, GST, yearly compliance fees (fire alarms, pest inspections, etc), Maintenance fees (tradespersons in QLD employed to carry out the many thousands of maintenance jobs in properties all over Queensland), 'Home, Contents and Landlord' Insurance.

Many investors have often also spent tens to hundreds of thousands more in renovations - employing local builders and trades persons. Then there are buyer's agents, lawyers, accountants as well.
But Labor, thinking we are too stupid to realise all of that are expected to just nod our heads and agree that it is 'fair'!

The Land Tax and Absentee Surcharge also ramp up per yearly land valuation increase. Many relying on rental income may have no other income source and therefore holding the property becomes unsustainable as the years go by. Any Capital Gains (remember as well - those who are also Aussies overseas deemed as a non-resident pay the full 50% CGT) will be wiped out after year-on-year accumulated expenses from these taxes. They are brutally excessive.

There is NO other State or Territory government in Australia that taxes its own Australian citizens for being 'Absent'. Queensland has the most punitive taxes in Australia.

When the legislation was introduced during the budget announcement - there was no grace period or exemption for those already owning property. But even worse, it was made retrospective! Yes that's right. I bought my property in January 2017 (settlement date) but I was charged a Land Tax & Absentee Surcharge - backdated to July 1st the previous year! Does that seem fair?

Many pensioners are asset rich but cash poor. They may hold an expensive piece of land - even if they live in a run down house. Off they go for a holiday overseas - maybe extending over the 6 months, or one of them suffers a heart attack overseas and is hospitalised, unable to return before the 6 month curfew. The more the land is worth, the more severe the taxes are. And there is NO EXEMPTION for these people. The OSR will force them to pay or else they will be forced to sell and pay the money to the State Debt recovery.

Imagine, you as a Queenslander have planned a trip with other friends and family - perhaps from other states in Australia. Coming up to the 6 month mark, you wave goodbye to them all at the airport as they stay on to travel more and enjoy life - because of the restrictive laws in QLD you are forced to return before everyone else. They have more freedoms.

Now all Queenslanders owning a property planning a long trip away - need to cut it short to avoid the taxes. You are now disadvantaged more that anywhere else in Australia. Prisoners by the State of QLD government for half a year - every year forever. Next time you see your Premier - you should address her as 'Governer'!

You are 'interned' back to Queensland to avoid being penalised. Wow, Socialist, Communist style government legislation if you ask me. And people aren't getting angry over this? Well, the truth is that until it affects you, many Queenslanders and others just do not realise what has happened.

The irony is as well that the QLD government's excuse for charging absentee Australians these punitive Land & Absentee tax - is for them to make a fair contribution whilst absent when there are non-Queensland residents owning property in Queensland who spend their money in other states when back in Australia!
And before the naysayers and die hard supporters claim that they should be spending money in Queensland - what about Queenlanders owning properties in others parts of Australia as well! The argument therefore falls down.

The Property Council is completely against this set of taxes.

Please lobby your government for change. Send your objections to the Premier and also let the opposition know. The more pressure the better. Time to unshackle Queensland home owners from the chains of the legislation - who wants a 6 month curfew placed on them? Nobody does. Totally unconstitutional. You are not the slaves of the government. Exercise your right to freedom of choice without such archaic punitive taxes and make a stand. Please.

'I would never have invested into Queensland property'

 

The above just reads like a big whinge to me *shugs*. Governments change laws all the time, sometimes you win, sometimes you don't.

FWIW I also think we should bring back a death/inheritance tax (joh bjelke-petersen can be blamed for taking that off the table in AU) - to reduce inter-generation wealth transfer which I think is insidious.

 

Yes they do change laws all time - true. But it is the retrospectivity and lack of forewarning for many investors, workers, retiree home owners caught unawares. If you were one of the victims of this tax I dare say you wouldn't be so dismissive! A tax that is so excessive that it will eventually exceed rental income for absentee investors - making the property unsustainable. Now that is unheard of. Yes there are examples of other punitive taxes imposed elsewhere over time, but relating to property, this takes the cake. Just calling it a 'whinge' is really lacking the insight and impact. This is a massive set of taxes. A fair tax it is not. Your comment on death tax/inheritance tax - well maybe we should keep going. What else do you want to hand over to the government. Very socialist mindset IMO. What families do with each other's wealth is their business IMO. Maybe you need to promote the Communist Party! Or maybe you are one of the Labor Party members - perhaps the treasurer!

 

I don't know the full details of the new tax, but neither the article nor the opening post made me feel particularly sympathetic towards those affected.

I hope there are some better arguments against it, or you're able to put it in a better way than you did, because it really does come across that the level of whinge was not proportional to the 'unfairness' of it.

 

Thanks for the input. Tried my best not to make it read like a 'whinge' as you say. I am not a great writer so tried my best to explain it. The taxes are excessive. My $12,500 rent income roughly net is reduced to less than $8,000 to live off. Not good. The taxes are set to ratchet up to upwards of $1000 per year at current rates making it impossible to hold the property long term. Don't know how that can be seen as fair. But anyway. There's plenty of folk affected who are very angry about it. You just need to be one of those or someone who will be in the future.

 

I am an Aussie who is also affected by this. Now I am told if I reside outside Aus for more than 6 months I am no longer Australian in the eyes of the QLD tax man. If there is no work for my profession in Australia then I need to pay extra taxes - thanks.

How can anyone think that is reasonable ?

More so I feel for the pensioners/retirees who have made sure they are self sufficient and don't rely on government support/money who now are not allowed to travel for more than 6 months of the year or have to pay large sums of money for no benefit to them.

Punish the people who are not a burden to the government for working hard, makes sense.

Interesting how there is a clause for govt, employees in overseas positions.... Who is normally employed in these posts ? - Politicians relatives

 

I always wonder why Brisbane is always behind Sydney and Melbourne, now I start realizing... another reason to look at Melbourne for me.

 

Sorry dxbpilot for being affected by this communistic set of taxes. It is the most punitive taxes on Australians ever devised. Yes, as a Queensland property owner you are a prisoner to Australia for 6 months of a year. You have a strict 6 month time limit and not one day more.
Otherwise you are punished with a set of taxes that are many times more the standard Land Tax rate (which only kicks in for land values over $600,000 for non-absentees but kicks in at $350,000 for absentees) plus the 1.5% absentee tax. It well and truly exceeds what we pay when non absent - so much so it is extremely disproportionate. Even a one-off bill for being an absentee is financially ruining people who have been stung.

There is this very misguided perception and belief that only the rich are affected by this. This cannot be further from the truth. In fact that is what one Labor spokesperson claimed when in contact with the Australlian Property Council. Labor fail to realise the many reasons why normal Australian citizens at times are overseas for extended periods.

There are a few of us who have been protesting to the QLD Labor Palaszczuk government, writing to the opposition and seeking legal avenues as we believe it is unconstitutional. The Australian Pensioners and Superannuants League QLD are horrified by these taxes. They have published an article by one of their members about this too.

The opposition - Deb Frecklington & Timothy Mander have expressed disagreement with the land taxes as well as the Australian Property Council.

It basically is a prison sentence for every single Queensland property owner and most do not even realise it - until one day they have a circumstance/opportunity that means travel overseas for an extended period.

I have argued the case as well about those who are exempted (government employees and only those who are working overseas for maximum 5 years & for a company they have worked for in Australia for at least one year) and querying exemptions being granted to those by Palaszczuk who do not meet exemption criteria as per her amended Land Tax legislation. But it appears she abdicated my query back down the chain to avoid answering. I have submitted a complaint to the Queensland Crime & Corruption Commission.

I am now back in Australia as a result of this combined tax because I cannot afford to be an absentee - the taxes have climbed an additional $2200 in one year. One gentleman I know has had to pay upwards of $20,000 and this has financially devastated him - all because he and his wife wanted to travel on an extended vacation. A VERY VERY expensive vacation I must say.

I had a medical condition I was struck down with overseas in which I could not fly for 4 months. The Office of the State Revenue responded to me indicating that there is no exemption for being an absentee on medical grounds. So in other words, the only way i was to be able to avoid the taxes was to take the risk and fly back at great peril to my health to avoid the tax - of course the airline would not allow someone with a medical risk to fly.

Ironically I was overseas as part of a rehabilitation plan my health care practitioners had agreed upon over several years and to stretch out my medical retirement payments because cost of living in Australia would not see that money last here. Self funded and medically retired. No job - just income from investment. Do not qualify due to assets threshold for disability support. But I am being punished like you for being self-funded but choosing to spend my time overseas more than a paltry 6 months a year.

Palaszczuk is a hypocrite - prior to her introducing the Absentee Surcharge (with corporate rate Land Tax) she touted for property investors who were turned off from Victoria's introduction of their version of the Absentee Surcharge (only applied to foreigners - Australians and New Zealanders exempt). Palaszczuk told foreign investors to come to Queensland to invest instead!!

Move forward to May 2017 Budget and suddenly they implement the Absentee Surcharge in QLD - but tack on Australian citizens. Victoria realising the unfairness of slamming Aussies, did not include them. After all, this was designed to detract foreign investors. Palaszcsuk Labor government however saw the tax grab they could make from the minority Australian absentees who would not be able to make much fuss and not affect votes. For the sake of $20-$30 million she thinks it's okay to spread misery and financial hardship onto many caught up in it. But many not thinking Labor would implement such a tax, many investors had bought property before the budget - taking up Palaszczuk's advice to 'invest in Queensland'. She has caught a lot of us in her trap. It is fraud.

I see similarities to the Chinese communist social credit system in place over there now. basically you are punished for travelling overseas for 6 months or more and rewarded with no fine for staying in the State. It is state control with punitive measures. They want you to confine your spending to the State and not anywhere else.

I could go on. Many examples.

I urge you to join my Facebook group 'Queensland Land Tax & Absentee Surcharge victims' support group as we are trying to get as many absentees together so we can lobby/petition/fight the Palaszczuk government. Please also let anyone else know who is an absentee or may become one.

 

Truly a backwards and hypocritical government. Total 'B' graders.

 

So am I correct in saying that if you are a tax resident in Australia living in your home in QLD but you work in Europe for 7 months consecutively of the year you still are classed as an absentee and have to pay the extra tax ?

Even if you are paying income tax in Australia ?

 

That's right. All they care about is that you have spent more than 6 months of a financial year overseas. Tax resident or not. It does not matter how much tax you are already paying, how much of your income you invest into Australia, and any other financial ties you have.
Absentee laws in QLD are not the same as non-resident laws set by Federal legislation. They are far more restrictive. And they audit all Queensland property owners via immigration records to see how long you have been overseas in a year. You will also need to declare when you are leaving and when returning to the Office of State Revenue.

As a Queensland property owner you do not have the same freedoms as other Aussies who own property in the other States and Territories. They can travel without restriction and take up jobs overseas and other opportunities. Unfortunately we have to forgo these things. Best to stick to a job in Australia and have caravan/local holidays only as a QLD property owner. Unless the job pays extraordinarily well for you then it may still be worth it. But for most of us the combined taxes are just too massive.

Year on year the Land tax & Absentee Surcharge will also increase substantially according to the Land valuations made (usually averaged over three consecutive years of land values), which you will realise in no way accurately reflects the actual market value of the property if you wanted to sell it. The land valuations in my opinion are yet another government rort.

 

I’ll say one thing. Meh.

 

So you're not overly excited about the predicament @Noobieboy?

I get the reasons for the angst of those impacted but, sadly for them, Governments don't go around knocking on individual's doors asking if there will be an adverse impact on them when formulating budget policy.

 

That's what a scrutiny committee is meant to do - to look into adverse impacts, unintended consequences. Victorian Labor government had the foresight and ethical approach to not include Australians. Same as New South Wales - both of whom implemented the Absentee Surcharge to foreign residents only. The interconnected finances of Aussies who are absent to the Australian economy shows they are on the whole already feeding money and hence tax revenue back into the system. Labor claims the surcharge and additional taxes are to make up for taxes not being paid that non-absentees are generally paying. The argument is false due to the absentee taxes being many times more than what is paid if they were not to be absent.
The fellow I know paying upwards of $20,000 after a trip overseas - in Victoria the Land Tax he would have only paid a couple of thousand. You tell me that this is just a mere inconvenience for some and not to make a fuss?
I agree governments cannot contain all collateral damage in their policies, but this was a woefully bad retrospective legislation.
The feeble 'Meh' comment - why bother? Obviously a sociopath troll type.

 

Land tax and the surcharge have potential to affect all QLD landowners.

Fact : Land is never automatically exempt from land tax in any state. Only by following the law can you access an exemption or concession. Sometimes that means you must apply for a concession or advise OSR you wish to use one etc.

 

That statement is not likely to be factual. A person on a "trip" is ordinarily resident unless they are not a citizen etc. A departure from Australia while travelling isnt a concern..There is always more to it than a simple airplane trip. Working overseas (distinct from doing work while overseas briefly) is a concern excepting public servants and defence etc

In QLD the absentee rules are a three limb test (simplified as)..
1. OSR need to be satisfied that you mainly resided in Australia, If not then these test/s are :
2. were away from Australia at 30 June or
3. have been away from Australia for more than 6 months in total during the financial year before 30 June.

If 1. is met then the issues in 2. and 3. are not even a concern.

eg A Qld landowner can move to NSW and its not a concern.

The Commonwealth and States have all agreed to implement broad tax reform to limit non resident (foreign) ownership of land. Many people are caught by this and will need to consider if its cheaper to sell than to retain. Its no different to buying a car that doesnt run well. There is nothing in Australian Law that imposes a right to hold property free of changes to tax laws. I suspect that causes some to post comments such as meh. Its a fair observation albeit harsh.

 

I think I got this...

1. This "absentee" 1.5 percent tax is incurred on every dollar you have in land valuations on QLD properties (combined) over 350k.

2. Doesn't matter if you're an Aussie citizen.

3. Until you go over 350k in land value and your apartments/houses are being rented out year round, you don't have to pay this new 1.5% absentee tax.

4. If you start to get slugged as an Aussie living overseas and need to sell a place in QLD then you'll also be hit with an additional 4 percent surcharge for stamp duty transfer or the like, along with losing 50% in capital gains.

Is this all correct???

This is absolutely outrageous.
The QLD Govt is legalised mafia and this is a SHAKEDOWN!
Lumping Aussie citizens in with foreigners is nothing more than a cash grab.

 

Thanks Paul. Understood.
As outlined after the budget in a supplementary paper by the then Treasurer Curtis Pitt - the only way for Absentees to avoid the absentee surcharge in QLD is to change individual ownership in the Title Deed to a Trust. I looked into this but the cost of changing that over would mean paying Stamp Duty and Legals again - the Stamp Duty of course based off a reviewed current appraised market value (may also be a CGT implication too?). The Land Tax also would then be set at the reduced $350,000 threshold for a Trust title holder regardless of being an absentee or not. I did the math and it was just too costly.

Re: Absentee/Land tax: exemption criteria are limited only to those working in authorised government occupations or for a company that is also based in Australia where you have worked for a minimum one year - maximum time allowed working overseas is for 5 years. As the OSR informed me - there are no other exemptions allowed. I would welcome any other way around this if I knew. I am open to any useful suggestions thank you.

I know of an individual who informed me he was granted an 'exemption' by Palaszczuk despite not meeting the exemption criteria. That was via the AG and Federal member/s who intervened for him. I asked for similar treatment to be extended to me, but Palaszczuk abdicated and it was flicked to Jackie Trad who passed it on - it ended up back with OSR to respond who of course do not have any special powers to override any law (if that in fact exists). I am trying to get to the bottom of how this person was given special treatment and if it was legal - hence why it is with Crime & Corruption Commission.

 

I don't think this new law is a matter of unintended consequences. it was intentional