NEW Queensland Treasurer Jackie Trad has defended the Government’s planned “Robin Hood” property tax ahead of her first Budget update tomorrow.
Ms Trad dismissed claims from the Property Council that the planned 2.5 percent land tax on properties worth more than $10 million would hurt jobs growth and property values.
“This is a very modest increase… we think it’s fair that those that can pay a little bit more, do pay a little bit more,” Ms Trad said.
Overnight, The Sunday Mail quoted property chiefs as warning Premier Annastacia Palaszczuk’s last-gasp election tax grab would destroy jobs and wipe more than $41 billion from land values in Queensland.
A 2.5 percent extra slug on owners of land worth more than $10 million was part of a suite of tax measures in Labor’s final campaign announcement, two days before last month’s state election win.
The Premier compared herself to Robin Hood, targeting only the richest.
But the Property Council says ordinary Queenslanders will pay the price, with a risk to employment and businesses forced to pass on the cost to consumers.
The land tax measure will be included in the Mid Year Fiscal and Economic Review to be presented tomorrow by Ms Trad, who was handed the role of treasurer in last week’s Cabinet reshuffle.
It is expected to raise an additional $227 million for the state’s coffers.
“The inconvenient truth for the Government is the vast majority of properties that will have to wear this tax are commercial, retail, industrial and tourism properties,’’ Property Council Queensland executive director Chris Mountford said.
It would inevitably flow on to tenants.
“We heard all through the election campaign that business cost pressures are particularly acute because of price increases like electricity … making it tougher for businesses to employ people. Now Queensland businesses will need to add land tax to their list of concerns before they think about hiring staff.”
Economist Nick Behrens said the amount raised through land tax had risen faster than any other tax in Queensland in the past decade – up 10percentnt, compared to the 66 percent Australian average.
The new measures mean only South Australia and Western Australia will have a higher rate. That will make it harder to lure businesses to set up in the Sunshine State.
“We’re in a race to attract and retain investment. Now we’re putting lead in our saddlebags that will impede our ability to compete,” Mr Behrens said.
Ms Trad said the extra land tax would apply only to the wealthiest 850 payers of land tax.
“It does not include farms, and it does not impact on the family home. The land tax ensures that those who are benefiting most from our growing economy and rising land values make a fair contribution to frontline services in Queensland.”
Ms Trad defended the Palaszczuk Government’s employment performance, saying 143,400 jobs were created in the first term of office.
Originally Published: brisbaneinvestor.com.au
Tax warning on share economy
THE October 31 tax lodgement deadline has arrived and Australians making money from the share economy are being urged to make sure they are on top of their tax obligations.
Money earned on Airbnb, Uber, Airtasker and similar platforms requires tax to be paid, according to Jason Robinson, director at accounting firm RBK Advisory.
“More clients are casually mentioning extra revenue streams,” Mr Robinson said. “I asked one client how their weekend was and found out they were earning $400 every weekend helping strangers move house.”
The government is beginning to regulate side income sources.
“Uber drivers are now required to be GST registered and hold an ABN before they can begin making money,” Mr Robinson said.
Airbnb and Stayz have become popular with landlords taking advantage of holiday locations by organising fixed leases for colder off-season months and then going short term for a bigger yield over summer, said Sandrina Postorino, managing director of Landlords Choice.
“During these months they can command much higher variable rents,” she said. “This all needs to be accounted for in their tax return.
“Another trap is when investors decide to Airbnb their main residence instead of their investment property, which means it is no longer completely exempt from Capital Gains Tax.”
Side hustles, or hobbies turned into income streams by entrepreneurial types also have tax requirements, according to Clayton Howes, CEO of fintech lender MoneyMe.
“If you make even one dollar on your side hustle that comes with tax obligations,” Mr Howes said.
Another confusing one is network marketing- think Avon and other modern incarnations- often undertaken by stay at home parents, said Katrina Haskew, managing director of Leading Advice.
“Where it can get messy is when turnover is more than $20,000, but they have consumed so much of their own products in testing, trials, or giveaways, that it is an effective loss,” Ms Haskew said. “This is extremely challenging to account for, so it’s paramount that stringent records are kept and presented to accountants.”
ATO assistant commissioner Kath Anderson said many Australians lodge their returns at the last minute and can make mistakes overlook income when in a hurry.
Catherine and Gabriel Mihalas both enjoy side hustles in addition to their regular jobs. Catherine joined Nucerity, a network marketing group in the health and skincare field, as a way to earn money in the years following the birth of son Samuel.
“The key attraction was the hope of building a future residual income where I could stop worrying about money completely, by putting in the groundwork today,” Mrs Mihalas said. “My plan is to eventually retire from nursing with this as my main income.”
Mrs Mihalas did not originally focus on what her tax obligations might be, until the company suggested during her onboarding process that she discuss it with her accountant.
“I’m still at a stage where what I’m doing is considered a hobby; I haven’t yet passed the threshold where it will be considered a business,” Mrs Mihalas said. “But I believe that when I reach that stage, the benefits of the program will outweigh the tax obligations.”
Husband Gabriel set up a side business in aerial drone photography, to combine a hobby with his background in aviation.
“It seemed like a great way to earn extra cash while doing something that I loved,” Mr Mihalas said. “I was aware of the tax implications from day one … I knew which records to keep to stay on track.
“I’d like to think it will become a significant additional revenue stream for our family.”
Originally Published: http://brisbaneinvestor.com.au
Tax changes for investors: What negative gearing means
YOU buy a house to rent out as a way to make money.
But the cost of maintenance and the interest you’re paying on a home loan is more than the rent you’re getting paid, so you are out of pocket. (more…)
No new State taxes for foreign property investors: Queensland Treasurer
Treasurer Curtis Pitt has ruled out any new State taxes targeting foreign property investors in Queensland.
Mr Pitt made the pledge following news that the Victorian Government will introduce a range of new property taxes for foreign investors.
The changes announced in yesterday’s Victorian State Budget include a three per cent stamp duty surcharge for house transactions from July 1, along with a land tax surcharge of 0.5 per cent to be applied from 2016.
“In the lead up to the election we made it very clear that we wanted to provide certainty to businesses and investors, and that we would not be changing the existing revenue policy settings this term of government,” Mr Pitt said.
“Therefore, we’re ruling out any stamp duty surcharges for foreign investors who purchase a house in Queensland.
“We’re also ruling out any land tax surcharge for foreign investors in this state.”
Mr Pitt said Queensland was an attractive destination for foreign investment.
“We want to send out a very clear message that Queensland is open for business and that we welcome foreign property investment,” he said.
“Yesterday’s decision by the RBA to slash the official cash rate to a record low of two per cent is all the more reason for investors to be buying property in Queensland.”
Under the new Victorian regime, foreign investors purchasing a $600,000 home would face a surcharge of around $18,000.
Property Council of Australia Queensland Executive Director Chris Mountford has welcomed the Palaszczuk Government’s decision.
“The Property Council applauds the decisive action taken today by the Queensland Government in immediately ruling out new State taxes on foreign investors,” Mr Mountford said
“By immediately ruling out new taxes on investment and maintaining their commitment to no new or increased taxes, fees or charges, the Queensland Government will boost confidence and certainty for the property industry and investors in Queensland.
“This action will strengthen Queensland’s position on the global investment map. In particular it creates a compelling case to invest in Queensland over Victoria.
“Foreign investment is an important part of Queensland’s economy. Foreign investment in property boosts housing supply and in doing so creates jobs and provides Queenslanders with more affordable housing.”
Treasurer, Minister for Employment and Industrial Relations and Minister for Aboriginal and Torres Strait Islander Partnerships
The Honourable Curtis Pitt via mysunshinecoast.com.au
6th of May 2015
- Infrastructure4 months ago
Fast Rail from Brisbane to Sunshine Coast Could Become a Reality
- Developments4 months ago
Construction to begin today on near sold-out housing project
- Market Place4 months ago
Queensland’s property flipping hotspots rise as profits roll in
- Opinion3 months ago
Millennials driving new-found optimism in housing market
- Opinion4 months ago
A COLOSSAL RISK: Huge danger sign for housing in Australia
- Opinion4 months ago
Noel Whittaker says don’t get beached by dream purchase
- Market Place7 months ago
The Sunshine Coast’s biggest hotspots – and none of them are Noosa
- Opinion5 months ago
New Gold Coast high-rise boom fuels fears of another crash