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  1. #1
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    Default Retrospective land tax to hit Queensland property investors

    Retrospective land tax to hit Queensland property investors





    Source: The Courier-Mail



    UNLESS we can stop it, sometime soon (maybe this week) new laws will be passed in Queensland which are breathtaking in their scope and audacity.

    They will massively increase the cost of living and doing business in Queensland.
    Under the innocuous title of the Valuation of Land and Other Legislation Bill 2010, the Queensland Government will literally rewrite history and rewrite the dictionary. It will retrospectively change the way land tax is applied in Queensland back to June 30, 2002.
    Imagine, as others have observed, if the Federal Government retrospectively changed the corporate tax rate from 30 per cent to 50 per cent and back-dated the decision by eight years?
    But the most serious change is to redefine "unimproved" land to actually include improvements.
    I know that sounds hard to believe, but the Bill will redefine "unimproved" to include the hard work of property owners, including (among other things) the buildings they have erected, the leases they have in place, business goodwill and infrastructure charges.


    The absurdity of this is highlighted by a clause in the Bill which states that "unimproved value" has been given "a special meaning that must be applied whether or not that definition accords with the ordinary meaning of that term".
    George Orwell, the author of 1984, would have been impressed with this real-life example of doublethink.
    What does all this mean?
    It means the more successful you have been at improving the value of your land or business, the more land tax you will pay.
    And contrary to the Government's claim, the Bill will have an effect on residential properties by increasing the value of residential land.
    While your home remains exempt from land tax, your investment property may not. Just think about this for a moment: the "benefit" you receive from rental income from an investment property will now be included in calculating the "unimproved" value of your land, which then determines your land tax bill.
    These effects are not restricted to property owners, with increased costs able to be passed on to tenants.
    Of significant concern is the fact that this Bill was introduced after the Queensland Government lost several court cases and subsequent appeals over the past six years. The courts consistently found that the Government was not valuing land in accordance with its own legislation.
    Each time, the Government argued for certain interpretations of the law.
    Each time, its case was dismissed. Now, the Government's losing arguments have been incorporated in this Bill.
    Natural Resources Minister Stephen Robertson had the audacity to dismiss the opinions of many learned judges in a press release on February 11 when he said it was the Government's intention to "correct the Appeal Court's interpretation of the law".
    How can business operate in Queensland with that kind of uncertainty?
    If the Government truly believed the courts got it wrong, it could have appealed to the High Court the fact that it didn't speaks volumes.
    I can be no clearer than this: If this Bill is passed, it will massively increase the cost of living and doing business in Queensland.
    It will increase costs for owners of investment properties and for all businesses, not just "the big end of town".
    And, alarmingly, the Government has also changed the appeal process.
    It will be almost impossible to object to a valuation issued by the Government, which will have the ability to decide whether or not a land owner is allowed to take the Government to court in a valuation dispute.
    Effectively Caesar judging Caesar.
    It is our view that this Bill has been designed solely to raise revenue from Queensland property and business owners.
    It is a bare-faced money grab.
    The Property Council is in no doubt that the Government has not considered (or, at best, doesn't understand) the full ramifications of the proposed changes. The Government doesn't even consider them as changes.
    In his speech to Parliament, the Minister said "the Government's policy has always been to value land as developed".
    In the past month I have not spoken to a single valuer who agrees with that interpretation. We must stop this Bill being passed because the changes will destroy property values and capital investment in Queensland.
    Steve Greenwood is executive director of the Property Council of Australia (Queensland)
    http://www.couriermail.com.au/proper...-1225837905665
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


 

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