Significant developers able to seek relief from foreign investor tax
With one working day before the Queensland Government’s Additional Foreign Acquirer Duty comes into effect, the Property Council has welcomed the release of guidelines for ex gratia relief and public rulings from the Commissioner further clarifying how the legislation will be administered.
Queensland Executive Director of the Property Council, Chris Mountford, says the relief framework will minimise the impact of the tax on job-generating development projects.
“Australian-based companies that are foreign-controlled will now be able to seek relief from the 3% surcharge on stamp duty on residential acquisitions, if they are able to demonstrate that they are a ‘significant developer’ or are undertaking ‘significant development’,” Mr Mountford said.
“This means that companies which contribute to the Queensland economy, create jobs for Queenslanders and add significantly to the state’s housing stock are not going to be taxed more, simply because they happen to have some level of foreign ownership.”
“While it is now the case that the tax will predominately be limited to the end purchaser and not developers building housing for Queenslanders, foreign investors in residential property have been a major driver of economic activity in Queensland,” Mr Mountford said.
“Foreign investment in property is a jobs generator, and the Queensland Government’s decision to impose this tax is clearly an additional barrier to this investment continuing into the future,
“This is a tax that puts real jobs - like plumbers, plasterers and electricians - at risk.
“We hope common sense will eventually prevail and this tax will be totally scrapped so that Queensland can once again be a state that welcomes job-generating investment.
The Property Council has been engaged with the Government over the last few months in the development of the ex gratia relief guidelines.
A similar exemption process for the foreign investor tax introduced in Victoria last year led to considerable bureaucratic delays and required the State Government to amend its legislation to enshrine a number of exemptions.
“The Queensland Government must ensure that the Office of State Revenue is adequately resourced to process exemption applications, to guarantee that investment is not held up by red tape,” Mr Mountford said.
“The concept of ‘in-principle’ pre-application advice is welcome, however it will only be of value to investors if the mooted 5-10 day turnaround is maintained by the OSR.”
“The Property Council is encouraged by the Treasurer leaving the door open to the potential for legislative amendments in the future, in order to further clarify who the tax is intended to capture, and to set some of these exemptions in stone.”
“As the tax takes effect, the Property Council will be monitoring the process timeframes and interpretation of the legislation to ensure our industry can continue to provide jobs and housing throughout the state.”