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
Budget for Upcoming Transformation of the CBD Revamped
Queensland Says No New Taxes on Foreign Property Buyers in Bjelke Petersen-like Strategy
The Queensland government has ruled out introducing new taxes on foreign buyers of residential real estate.
They are the only state that actually monitors foreign investment, so were in the box seat to implement such a tax regime.
The rejection comes after the populist Victoria Labor government’s recent budget unveiled a new tax regime that will seek to tax foreign buyers and foreign owners.
Queensland has vowed not to follow Victoria’s lead and introduce any new taxes on foreign property investors.
Treasurer Curtis Pitt said Queensland welcomed foreign property investment.
“We’re ruling out any stamp duty surcharges for foreign investors who purchase a house in Queensland,” said Pitt.
“We’re also ruling out any land tax surcharge for foreign investors in this state.”
The Victorian state budget, revealed on Tuesday, included a 3%t stamp duty surcharge for homes from July and land tax increases of 0.5% from 2016 for offshore-based investors.
News Ltd reported Queensland executive director of the Property Council, Chris Mountford saying the action will strengthen Queensland’s position on the global investment map.
“In particular it creates a compelling case to invest in Queensland over Victoria.”
Nothing new for Queensland as that was how former premier Joh Bjelke Petersen saw the state into an upswing when Queensland didn’t have death duties like other states.
It was in 1977 when the Premier of Queensland Joh Bjelke Petersen abolished death duties and a wave of Australia’s elderly headed towards the Gold Coast with the high rise following as dying in Queensland became a tax avoidance scheme and Surfers Paradise became a retirement haven.
By JONATHAN CHANCELLOR via propertyobserver.com.au