Property Chat forum - some defenders of Labor's Absentee Surcharge & Land Tax - counter argument

A popular Property Chat forum I am subscribed to has a few people that respond who support/defend the QLD Absentee Surcharge and Land tax. It seems that they just accept the spiel provided by Labor as to why it is justified.

For them that makes it alright to tax the hell out of people so that they are left financially battered and wanting to hang themselves.

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Here is a copy of the recent post made by a defender of the taxes who is a frequent poster on the Property Chat Forum:

FROM Paul@PFI:

Premier doesnt make the laws. She leads the party that governs. Parliament makes the laws. At the time the law was debated it was felt that the state of the QLD economy was adversely affected by Citizens and non-citizens and that non-occupant and investor demand was driving values up to the detriment of QLD resident seeking to buy property. So they wanted to soften this to remove off shore ownership driven demand. It has a side effect of harming some who leave Australia.

No better example of the effect of what happens when laws change long after you buy a property. Shorten now has plans of his own.

Extract of an estimates debate in QLD Parliament concerning the absentee provisions. Interesting to note that the absentee matter is not that new. Its been a part of laws for a LONG time but now a surcharge applies. There is also a link here to the EM handed to members at the time of debate. The policy impact is well documented and its intent is clear despite it seeming unfair it was adopted to curtail rising prices affecting QLD residents.

Ms TRAD: "For the benefit of the member for Everton, an absentee under the land tax act is a person who does not ordinarily reside in Australia including a person who is absent from Australia at 30 June or has been absent from Australia for more than six months, as I said in the original response. The concept of an absentee has been a part of Queensland’s land tax legislation for many years and its existence can be traced back as early as 1935. The government’s 1.5 per cent land tax surcharge applies to absentees who are liable for land tax if the value of their taxable landholdings is $350,000 or higher. The surcharge applies to land tax assessments from 2017-18 and is expected to generate $20 million in 2017-18. For example, if the taxable value of the absentee’s landholdings subject to land tax is $750,000, the surcharge will apply to the amount calculated as $750,000 less $349,999. The surcharge applies to absentees and is in addition to the current land tax rates for absentees, companies and trustees. There is a reasonable basis for introducing this modest surcharge to apply to absentees. The surcharge ensures that absentee owners of land are making a fair contribution towards taxes that are used to deliver and maintain high standards of service and infrastructure in Queensland. Absentee owners benefit, such as through the capital appreciation of their landholdings, from the high standard of services and infrastructure delivered and maintained by a broad range of taxes in Queensland borne by resident taxpayers. Resident Queensland persons who are liable for land tax are not affected by the surcharge and continue to benefit from the higher tax-free threshold and lower land tax rates applying to individuals". Mr MANDER: "Thank you for that confirmation—"

MY RESPONSE:

"The surcharge applies to absentees and is in addition to the current land tax rates for absentees, companies and trustees. There is a reasonable basis for introducing this modest surcharge to apply to absentees. The surcharge ensures that absentee owners of land are making a fair contribution towards taxes that are used to deliver and maintain high standards of service and infrastructure in Queensland. Absentee owners benefit, such as through the capital appreciation of their landholdings, from the high standard of services and infrastructure delivered and maintained by a broad range of taxes in Queensland borne by resident taxpayers."

The Absentee concept has been in law for a long time but the taxing of Australian citizens as Absentees is a first (not to be mixed up with the longer term non-resident applicable taxes imposed by the Commonwealth - which also allow for far more leeway and exemptions for the 'non-resident' category).

The justification spiel that the Labor government provides is utter rubbish. Firstly, the surcharge is not 'modest'. It is massive. Totally and utterly exorbitant and impacts people immensely. If people get bills that turn them suicidal and/or financially crippled then one has to ask, did they go too high in the percentages? Yes they did. My bill was ridiculously high, wiping out 2/3 of my rental income. Others with higher land values have been hit with even worse bills. A retired couple who embarked on a world adventure got slammed with over $20,000 bill. Others right up there and beyond. Has put travel restrictions on nearly all Queensland property owners (most will not be able to afford the ridiculously inflated tax bills).

The double tax (Absentee surcharge plus the Land tax at reduced threshold) are way and beyond the taxes that residents are making, so that any apparent taxes not being paid in absence (would be along the lines of taxes from utility use, mobile, internet, road tolls, public transport, motor vehicle registration and then GST from local shopping etc - Commonwealth taxes anyway). Most Australian absentees are paying water & sewer connection & service rates, council, electricity connection, insurance, income taxes (salary or investments), and other State/Commonwealth taxes. Plus usual holding costs for a property.

Before the new Absentee surcharge - Australian citizens who spend time abroad past the 6 months and not meeting the 'normally reside' test were already contributing by paying taxes. It was never the case that they were not paying enough. That is total and utter BS. The gullible citizens sucked in to this rhetoric or sitting on their hands have just handed over another freedom.

Foreign citizens on the other hand - ok there is an argument there for implementing the surcharge and hiked land taxes. They may well just be holding a vacant property and not contributing other than paying holding costs and mandatory rates and impacting on house prices for 'Australians'.

You should look at the Victorian inquiry into the impact of the Absentee Surcharge and why they did not implement it on Australian citizens there. In fact New Zealanders were also exempted (so New Zealanders - foreign citizens, have more freedoms than Aussies owning property in Queensland).

The 'infrastructure' argument - not all property owners will benefit anyway from infrastructure - that is very location specific.

Bottom line is Queensland went way too far and have forced a good population of Australians who are overseas for a myriad of reasons (just like Aussies in neighboring States) to be smashed with these taxes, others having to now return to Australia and pull the pin on holidays, long term or contract work, education, scholarships, volunteers, expats, retirees, extended family visits, career breaks, long service leave etc etc). Disadvantaging Queenslanders from taking up opportunities overseas compared to their State/Territory neighbours who can go without punishment. Most will push you into absentee status. Good luck arguing with the Treasurer over your normal residence for that financial year. From feedback the Treasurer will deem you an absentee unless you can prove otherwise.

The Queensland Pensioners and Superannuants' League QLD were only recently made aware of these taxes when one of their members got hit with it. A shock bill. That's because of the sneaky way it was introduced. They are horrified. Several retirees who have/are planning for bucket list long haul adventures have either been slammed with a massive bill or now have to reduce or cancel their overseas dream adventures. Nice way to treat your own Aussies.

Palaszczuk herself went over to London University to complete a scholarship years ago. Gee, I wonder how it would be if she had owned a property in QLD back then and there was this Absentee surcharge? Unless she was well off, she would most likely passed up that opportunity and remained in Oz. She would quite possibly not have advanced her career to where she is today. Just like many other Aussies now owning QLD property now need to weigh up such decisions since 2017 budget. How bloody restrictive, backwards thinking and punitive this is. It is just too unfair for Australians.

Me and other Queenslanders and interstate Aussie Queensland property owners never signed up to being prisoners of the State thank you. We are not foreigners. We are Australians. Turning Aussie investors, owner/occupiers away from Queensland.

If you are affected please join my group Queensland land Tax and Absentee Surcharge Victims' Support Group on Face Book.

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Of course I expect the trolls now to attack with 'eye rolling' emojis and other comments about it just being a 'whinge' , 'non-convincing' etc. Most likely absolute devotees to Labor, Labor - maybe even Labor MPs themselves,investors not wanting any bad news about QLD property market to adversely affect their investments (i.e. vested self interests), and/or just total socialists, protectionists, etc.