Expats owning property in Queensland Australia - Land tax

[aussienam]

Hello, 

I am reaching out to all expatriates from Australia who own property in the state of Queensland.  As you should be aware there were significant changes made by the Queensland State Labor government in the 2017 Budget.  

 

The changes made were to implement an Absentee Surcharge to any Australian citizen holding property in Queensland who is absent for more than 6 months of a financial year (1 July to 30 June).  The only exception to this rule being those in approved occupations (government job posting overseas or approved private company where employee has spent a minimum of one year working for that company in Australia and only works a maximum f 5 years overseas).  

 

In addition to the Absentee Surcharge, anyone deemed an absentee is also subject to the Corporate Land tax rate - meaning a reduced Land Value threshold from $600,000 to $350,000.  

 

Therefore absentees are now liable for Land Tax at Corporate rates and an Absentee Surcharge of 1.5% of the land value.  The changes were also made to be retrospective to back capture any person now deemed as an absentee to the beginning of the financial year (the year before starting 1 July, 2016).

 

The Treasurer at the time Curtis Pitt when detailing the Budget, he glossed over a lot of the details and the focus was on Foreign Investors who are also targeted.  The flow on from this was that many reports from media failed to indicate properly the fact that absentees included Aussie citizens. 

This relying on income streams from rental yields have been seriously impacted. 

 

Expatriates owning property in Queensland now have to decide whether they can afford to keep paying the new Land Tax & Absentee Surcharge (LT&AS), whether they need to now sell their property, or whether they now need to decide if they can actually afford to be an expatriate anymore - that is considering having to return to Australia to live.  

 

The LT&AS is set to massively increase over the upcoming years due to an upswing in the Queensland property market.  This may seem good news for Capital Gains, but for many, those gains cannot be realised until several years of absorbing upfront set-up purchase costs, renovations and the fact that they will need to pay Capital Gains Tax as a non-resident or not holding a main residence (such as an investment property).  The LT&AS also has the effect of wiping out current projected % capital gains.  Land valuations are averaged out over the last three consecutive years and this is used to calculate the annual LT&AS.  

 

The changes to the legislation were unexpected and have caught many expats owning property in Queensland by surprise and now facing massive annual bills.  

 

The Property Council of Australia is also totally against Labor's legislation.  

 

There is a Queensland Land Tax and Absentee Surcharge Victim's Support group on Facebook. The more affected people who join the better.  

 

Links to relevant article and Brisbane Times report.  

https://medium.com/@tysonlehn/the-land-tax-absentee-surcharge-debacle-of-queensland-state-government-australia-b5604119277a 

 

https://www.brisbanetimes.com.au/politics/queensland/i-would-never-have-invested-into-queensland-property-20180718-p4zs5e.html 

 

 

[4MyEgo]

This is nothing new for Sydney, what you have to watch out for in the coming year if you are a non resident for tax purposes from 1 July 2019 if it has passed parliament and is legislated is the capital gains tax on your property.

 

I have covered this in another topic, and it is really scary $hit, so read up on it, and get ready to unload that property.

 

Best thing I did was get rid of my property just as I became a non resident and put my money in the stock market as there is no tax payable on stocks that are fully franked, and there is no capital gains tax either, but that's another story.

 

Do yourself a favor, read this article because if it is passed, you will be up for a $hit load of capital gains tax oi.

 

 https://www.hlb.com.au/cgt-main-residence-exemption-to-disappear-for-non-residents/ 

[aussienam]

21 hours ago, 4MyEgo said:

This is nothing new for Sydney, what you have to watch out for in the coming year if you are a non resident for tax purposes from 1 July 2019 if it has passed parliament and is legislated is the capital gains tax on your property.

 

I have covered this in another topic, and it is really scary $hit, so read up on it, and get ready to unload that property.

 

Best thing I did was get rid of my property just as I became a non resident and put my money in the stock market as there is no tax payable on stocks that are fully franked, and there is no capital gains tax either, but that's another story.

 

Do yourself a favor, read this article because if it is passed, you will be up for a $hit load of capital gains tax oi.

 

 https://www.hlb.com.au/cgt-main-residence-exemption-to-disappear-for-non-residents/ 

Thanks for the advice.  Yes the non-resident status really does add to the issues.  Aware of that as well cheers - but Brisbane property was not a main residence anyway but an investment property so was always going to cop the CGT (may have to move into it for a time to convert that to main residence before I offload it somehow). 

 

My Brisbane property is still valued much less that my initial outlay I paid for it in 2017 (settled 4 months before the QLD Budget introduced the Land tax & Absentee Surcharge changes totally unaware like everyone else outside the inner circles of the Labor Gvt bombshell announcement). 

 

So I am basically now forced to split my time between living in Australia somewhere and holidaying in Thailand.  Is a bloody nightmare.  Otherwise selling now at a massive Capital Loss.  QLD 6 month curfew to avoid the taxes is totally ridiculous and Communist mentality.  

 

Shares set up as a non-resident as well I have read on pitfalls changing from resident status owning shares to non-resident owning the same shares when it is time to sell.  It seems that I should sell all shares prior to becoming a non-resident then I can buy back in after that point to avoid future capital gains tax liability.  Could be wrong: 

http://www.austexpatinvestor.com/how-australian-expats-can-make-money-on-the-sharemarket-without-paying-tax/ 

 

 

[aussienam]

On 8/21/2018 at 9:02 PM, zmak said:

Best thing I did was sell up from there and buy in Bangkok. Punters who keep their homes in that nanny state would be be renting them out for very little return after all the endless taxes are paid. more like rape than rent return

It's worse than a nanny state - it is becoming full blown Communist.  Queensland Labor is on a mission to control and screw over as many of its citizens as possible in taxes and new laws.  

[Esso49]

9 minutes ago, aussienam said:

It's worse than a nanny state - it is becoming full blown Communist.  Queensland Labor is on a mission to control and screw over as many of its citizens as possible in taxes and new laws.  

Just wait until the Thai government confiscates all property owned by foreigners ( condos of course ) .  The smile will be on the other side of your face when you crawl back to your homeland,  deeply appreciative of it being a nanny state. 

[aussienam]

4 minutes ago, Esso49 said:

Just wait until the Thai government confiscates all property owned by foreigners ( condos of course ) .  The smile will be on the other side of your face when you crawl back to your homeland,  deeply appreciative of it being a nanny state. 

If Thai government did that I think their economy would collapse!  In that scenario there are other expat friendly countries to retire in.  Thailand is not a deal breaker if it becomes too hard there as well.  No, will never be appreciative of what QLD Labor has done thanks!  Not a masochist.  Already seriously set me back in more ways than one.  Federal government not much better either.  

[4MyEgo]

12 hours ago, aussienam said:

Thanks for the advice.  Yes the non-resident status really does add to the issues.  Aware of that as well cheers - but Brisbane property was not a main residence anyway but an investment property so was always going to cop the CGT (may have to move into it for a time to convert that to main residence before I offload it somehow). 

 

My Brisbane property is still valued much less that my initial outlay I paid for it in 2017 (settled 4 months before the QLD Budget introduced the Land tax & Absentee Surcharge changes totally unaware like everyone else outside the inner circles of the Labor Gvt bombshell announcement). 

 

So I am basically now forced to split my time between living in Australia somewhere and holidaying in Thailand.  Is a bloody nightmare.  Otherwise selling now at a massive Capital Loss.  QLD 6 month curfew to avoid the taxes is totally ridiculous and Communist mentality.  

 

Shares set up as a non-resident as well I have read on pitfalls changing from resident status owning shares to non-resident owning the same shares when it is time to sell.  It seems that I should sell all shares prior to becoming a non-resident then I can buy back in after that point to avoid future capital gains tax liability.  Could be wrong: 

http://www.austexpatinvestor.com/how-australian-expats-can-make-money-on-the-sharemarket-without-paying-tax/ 

 

 

You know Australia is becoming like Italy, it has had 5 Prime Ministers in 5 years when Malcolm ousted Tony, really becoming a joke.

 

Seriously cannot understand their mentality, they don't want foreign residents to own property and they will tax the living crap out of them if they want to hold property in Australia, fair enough, but we are caught in the crossfire, as we are Australian Citizens living overseas, and should be taxed according to the Australian taxation system regardless of residency status in my opinion, but then again I don't make the rules, just use to vote the a$$holes in, that said, they also strip you of your voting rights when you are declared a non resident/foreign resident, same meaning.

 

Best thing I did was flick my place back in Sydney in the middle of 2016 just before becoming a non resident.

 

Do your research on the stock market as a non resident, and I will agree if you have only just purchased your joint, going to be hard to break even in the short term, hopefully the land taxes you will be paying are tax deductible, depending on your status.

 

As always, seek a qualified accountants advice on the above and best of luck.

 

Australia really has lost the plot.

Edited August 22, 2018 by 4MyEgo

[BEVUP]

40 minutes ago, 4MyEgo said:

Australia really has lost the plot.

& you can't just blame the 1 government - they all had their share of <deleted> a good country

All this non resident shit is crap

So most of the people here are saying you can't go on a "around the world holiday " which may last 12 mths or more ( which leads to complete discrimination if you come back & try & get work ) & not still be a Resident since you are maintaining a property (read the Tax laws )

 

Edited August 23, 2018 by metisdead
8.) You will not post disruptive or inflammatory messages, vulgarities, obscenities or profanities.

[4MyEgo]

10 minutes ago, BEVUP said:

& you can't just blame the 1 government - they all had their share of <deleted> a good country

All this non resident shit is crap

So most of the people here are saying you can't go on a "around the world holiday " which may last 12 mths or more ( which leads to complete discrimination if you come back & try & get work ) & not still be a Resident since you are maintaining a property (read the Tax laws )

 

Your 99% correct my friend, however the other 1% is incorrect, i.e. if you go on a round the world cruise and have your passport stamped at each country, there is your evidence, so that confirms your residency as an Australian resident, e.g. your not residing in the one country, that is the exit pass.

 

Unfortunately discrimination only covers certain areas, like age, religion, marital status, and a few others, so being crowned a non resident doesn't come into it, maybe we should start a campaign to include being an xpat...lol

[ELVIS123456]

Just another nail in the expat coffin guys - many more to come I am afraid.  All State Govts and Federal see expats as 'getting away' with something, because we are not spending our money there (and paying GST).  The fact that we also do not give them any 'expenses' (especially medical costs) is not considered.  Discussed in more detail in another thread - but suffice to say that Aust truly has become more a nanny socialistic state than a free capitalist country. We need our own Trump ? 

[aircooledflat4]

On 8/21/2018 at 6:55 PM, aussienam said:

expatriates from Australia who own property in the state of Queensland

All property? including PPR?

[4MyEgo]

On 12/23/2018 at 4:28 PM, aircooledflat4 said:

All property? including PPR?

Land tax: home exemption eligibility tester

 

https://www.qld.gov.au/environment/land/tax/calculation/eligibility

[Henryford]

I always thought Australia was the land of the free, but it sounds worse than the Liberal Elite we have ruling the UK.

Edited December 30, 2018 by Henryford

[theguyfromanotherforum]

Thank you Australia. Just means that Chinese investors will choose Toronto over overpriced Sydney.

 

Perhaps this is the reason overpriced real estate in Sydney is collapsing.

 

Thanks again!

[madmen]

Thank you Australia. Just means that Chinese investors will choose Toronto over overpriced Sydney.
 
Perhaps this is the reason overpriced real estate in Sydney is collapsing.
 
Thanks again!

Do you read the OP? Sydney is not in QLD lol
Toronto is expensive and not desirable. Who the hell wants to suffer a winter there unless they are locals?

[EmilyUM]

Unfortunately I am among one of these affected Australian citizen oversea. Moved to US in 2017, have filled in Landtax exemption form according to requirements at that time. Thought that I have prepared all that I need to do and yesterday I received a letter from them asking me to pay 2-years Absentee Landtax with surcharges. It is an unbelievable amount and if I fail the appeal, it is like my past 10 years of hard work has gone zero. The following article clearly illustrated how the regulation was passed not following proper procedure and how details of the regulations was not reported (including it will inflence oversea Australian citizens). 

https://medium.com/@tysonlehn/the-land-tax-absentee-surcharge-debacle-of-queensland-state-government-australia-b5604119277a

[aussienam]

To all Australians owning property in Queensland.  After initiating an exhausting campaign and with the help of others who joined to help the cause, the Queensland State Labor government yesterday in their annual budget announced that Australian Citizens will no longer be deemed as Absentees if away from Australia for more than 6 months of the year.  This is fantastic news for expats who will save many thousands of dollars per year and will allow those to have the choice to retire overseas now.  Collectively this is millions saved for Aussies.  

 

Here is the link to the government site that outlines the changes to Land Tax and the Absentee Surcharge to come into effect from 30 June 2019.  

 

https://budget.qld.gov.au/files/19-004_Budget 2019-20 Budget Statements - LANDTAX_3.pdf?fbclid=IwAR0B5EnY6G1Qypk1G0f1aNNnCQxmjnlne0P4gtUAylON9Dct5qwE3SRwYio 

[4MyEgo]

18 hours ago, aussienam said:

To all Australians owning property in Queensland.  After initiating an exhausting campaign and with the help of others who joined to help the cause, the Queensland State Labor government yesterday in their annual budget announced that Australian Citizens will no longer be deemed as Absentees if away from Australia for more than 6 months of the year.  This is fantastic news for expats who will save many thousands of dollars per year and will allow those to have the choice to retire overseas now.  Collectively this is millions saved for Aussies.  

 

Here is the link to the government site that outlines the changes to Land Tax and the Absentee Surcharge to come into effect from 30 June 2019.  

 

https://budget.qld.gov.au/files/19-004_Budget 2019-20 Budget Statements - LANDTAX_3.pdf?fbclid=IwAR0B5EnY6G1Qypk1G0f1aNNnCQxmjnlne0P4gtUAylON9Dct5qwE3SRwYio 

I believe from what I have read in the link above, it only applies if you reside in the property: 

e.g. "Resident individuals: "If an individual uses the land they own as their home", then NO land tax applies to the land.

 

I would assume if you live overseas and the property is leased then the ball game changes, as it does with the ATO, income and capital gains taxes payable.

 

[aussienam]

Correct regarding Land Tax.  This long campaign was not about scrapping Land Tax, the same as what applies to non-absentee.  But for me and any others who own investment properties in Queensland, the 1.5% Absentee surcharge is no longer applicable to Australian citizens, also meaning that the Land Tax threshold that was lowered to $350,000 for 'absentees', has now been raised to match the resident threshold of $600,000.  Saving many tens of thousands per year for those overseas 6 months or more per year.  

 

The ATO rules regarding non-residents income tax at Foreign Resident Rate as well as Capital Gains Tax are of course separate matters.  But at least now for investors in Queensland properties we are not being so severely hammered financially to the point many were putting their QLD properties on the market.  And we have a place to come back to if needed.  

Edited June 20, 2019 by aussienam

[4MyEgo]

5 hours ago, aussienam said:

The ATO rules regarding non-residents income tax at Foreign Resident Rate as well as Capital Gains Tax are of course separate matters.

Maybe one day the government will wake up and not penalise its "Citizens" who reside overseas for owning Australian property, I did say one day ????

 

Edited June 20, 2019 by 4MyEgo