What’s not to love about budget time?!
Earlier in the month, the Queensland State Government announced the budget for 2018 – 2019. Within it, a number of major road and transport infrastructure projects were awarded further funding, such as the:
- Sunshine Coast Rail line duplication ($161 million)
- Toowoomba Second Range Crossing Helidon to Gore Highway upgrade ($534.3million)
- Brisbane’s Cross River Rail ($733million)
- M1 upgrades ($487 million).
All in all there were no real surprises here, as a lot of these infrastructure projects have been on the cards for a while. What this does give us is a bit of insight in to which projects are likely to come through in the nearer term.
What’s also interesting here, and what any property developer will be paying most attention to, is the proportion of funding that is going to South East Queensland, and this is in line with the regions’ strong growth and future infrastructure needs. In short, if you’re considering where to develop, there’s a very strong case for Brisbane, the Sunshine Coast, Toowoomba, and the Gold Coast.
We were interested to see the Tourism, Health and Cultural Arts sectors receiving funding for projects such as a fund to attract new international airline routes and cruise ships to Queensland, improvements to Hospitals, and a refresh for the Queensland Performing Arts Centre.
What did come as a bit of a surprise was a few policy changes, some of which will have a direct impact on anyone who has a large property portfolio, or is looking to create a larger property portfolio.
First Home Buyers Grant Reduced
Starting from July, first home buyers will receive $15,000 (as opposed to $20,000). While it’s only a $5,000 reduction, it’s likely to have a slight impact on the number of new home owners entering the market. First Home owners play an important role for our developer clients, so it will be interesting to see if this reduction is material enough to have an impact.
Land Tax Increase
State Government is looking to raise around $17million in revenue through Land Tax, over the next year with a projected 11 per cent increase in 2018 – 2019.
Under the new taxes introduced in Tuesday’s budget, foreign landowners with more than $10 million worth of landholdings will now be in line for a 0.5 per cent increased rate of land tax.
Individuals with properties worth more than $10 million will now incur an additional rate of 2.25 per cent (or 2.5% for trusts or companies) for every dollar of taxable value over $10 million. That is certainly not small change for anyone sitting on large parcels of land with minimal holding income.
Additional Foreign Acquirer Duty
Queensland is now in line with the other states with the announcement that the state government will increase taxes for additional foreign acquirer duty.
The AFAD is an additional tax on relevant transactions that are liable for transfer duty, landholder duty or corporate trustee duty which involve a foreign person directly or indirectly acquiring certain types of residential land in Queensland by foreign persons.
The duty will rise from 3 per cent to 7 per cent and is forecasted to result in an increased revenue of $33 million per annum. This is sure to have an impact on foreign purchasers and with sales in high end projects already hard to come by, lets hope the impact isn’t too large!
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