Anna slaps down plan for huge tax bills

Property investors have welcomed the scrapping of a controversial new land tax - but one group may be worse off.

Queensland Premier Annastacia Palaszczuk has scrapped plans for a controversial new land tax, to the relief of certain vocal industry groups.

However, the backflip may see first home buyers at more of a disadvantage by maintaining already fierce competition with investor owners for the small amount of properties on the market.

The proposed system involved basing investor tax bills on the value of their property holdings nationally.

It was met by a backlash from industry groups who said the plan would stifle investment by creating uncertainty.

One group will lose out after Queensland scrapped a controversial land tax plan that would have cost property investors tens of thousands of dollars..

Leaders from other states also helped shoot down the proposed tax - which was passed by the Queensland parliament in June - by refusing requests to provide their residents’ information.

A spokesperson for Treasurer Cameron Dick confirmed the change on Friday morning ahead of a national cabinet meeting involving state leaders.

It is understood Ms Palaszczuk had spoken to her interstate counterparts on Thursday evening and was aware of plans not to cooperate.

A controversial new land tax plan has been scrapped by Queensland following resistance by other state leaders including NSW Premier Dominic Perrottet. Picture: NCA NewsWire / Gary Ramage

The plan was tipped to affect 10,000 landowners and add $20 million a year to government coffers.

Director of Sales for national real estate agency Upside Realty, James Kirkland said investors could breathe a “sigh of relief”.

“There was a lot of concerned investors in our client base that were worried about what their tax bill was going to be,” Mr Kirkland said.

“There was a lot of discussion around what they were going to do to try and mitigate that and there was talk of really selling down investments within Queensland.”

But, he added, the plan may have created some relief for first home buyers by opening up space in the market had it gone ahead.

“There’s been a stock shortage in Queensland for some time,” he said.

“So the idea of a rush of listings coming to market might have been highly exciting for first homebuyers looking to have a wider choice of properties.”

Real estate industry representatives broadly welcomed the change but said first time home buyers could be worse off. Picture: NCA NewsWire / Dan Peled

Earlier this month Real Estate Institute of Queensland chief executive Antonia Mercorella called the tax plan as unique as it was illogical.

“It is irreconcilable that the Treasury expects to legitimately raise tax on the basis of value of property held outside of Queensland, for the purpose of funding infrastructure within Queensland,” she said.

Ms Mercorella said the plan could have seen commercial and private rents increase and detract from the appeal of investing in Queensland.

In conceding the plan would have to be shelved, Ms Palaszczuk said it relied on the “goodwill of other states”.

“It actually came out of the treasurers’ meeting, so there were discussions held at that and it does rely on the goodwill of other states,” she said.

“If we can’t get that additional information, I will put that aside.”

Political rivals claimed the plan would see investors paying thousands of dollars more in tax on their properties, which would be passed on to renters.

“The Opposition said from the second it was announced last year it was a renters’ tax that would drive up rents in the middle of a housing crisis,” shadow treasurer David Janetski said.