Queensland has been a state where property investors have traditionally made better returns on a net and gross basis, from investment property in the state, compared with those in New South Wales and Victoria.
To recap, gross investment returns is the ratio of current property market value compared with the current rental paid, assuming the property is fully let. The Net Investment return is a more real-world measure, which takes account of actual vacancy rates, cost of mortgage, maintenance, and management of the property. In our surveys, many property investors have no feel for their true net returns, clinging to the prospect of eternal capital gains.
Those in Victoria are worst placed, which explains the very strong interstate investment in Queensland, one reason why prices and rents had shot up in the past couple of years.
But there is something afoot in Queensland, which could change this picture, possibly significantly. Indeed, those following the AFR will have noted its fever pitch campaign against an Australian-first move whereby landholders will have to voluntarily disclose their interstate holdings in other states before being taxed for their Queensland holdings. These land tax changes were first announced in the 2021-22 budget update on 16 December 2021. Queensland Treasury has said the tax change will raise only $20 million a year from 2023-24 and impact about 10,000 landholders, most of whom who live interstate.
Investors are irate with the changes, saying they will drive investors out of Queensland as well as push up rents and that they felt like they were being taxed twice in two different states. A spokesman for Mr Dick acknowledged this week the tax change would affect some Queensland investors.
So now Queensland owners are now working out how they will be stung by the tax.
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