The lack of stamp duty reform in Queensland’s state budget is disappointing, says a tax expert.
Brisbane-based Sam Mohammad (pictured), who leads accountancy firm RSM Australia’s national indirect tax practice, said the time was right for the Queensland government to address stamp duty reform.
He noted “a disappointing” absence of this reform in the state budget despite record residential property prices and increasing interest rates. The Queensland budget is due to be handed down next week.
“Queensland’s top marginal stamp duty rate of 5.75% remains one of the highest in the country with Queensland also having the widest stamp duty base of any state,” said Mohammad.
This year’s stamp duty revenue is expected to top $6 billion – $1.4 billion more than was predicted in last year’s budget.
Read more: Queensland sidesteps stamp duty reform
“Despite the swelling of the state’s coffers due to stamp duty, none of the additional revenue is to be returned to Queenslanders in the form of stamp duty relief,” Mohammad said. “Once again, stamp duty remains the forgotten child in Queensland from a tax reform perspective.”
The NSW government confirmed it would be introducing a First Home Buyer Choice scheme in 2023, which gives first home buyers the option to pay an annual property tax instead of lump sum stamp duty.
“New South Wales’ alternative system of an opt-in land tax could make home ownership more accessible, support household mobility and better facilitate economic growth and prosperity for Queensland, and we would like to see this canvassed beyond the Queensland Budget,” Mohammad said.
He said the NSW scheme had resonated strongly with most tax experts, first home buyers, and industry groups.
Commenting on the Queensland 2022-23 state budget as a whole, Mohammad said it had succeeded in delivering “shock and awe” to the business community and signposted “clear economic winners and losers” with its line-up of revenue-boosting announcements.
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Queensland was expected to report a 29.4% annual increase in tax, royalty, and GST-based revenue this year, up $10 billion on 2020-21, following a period of prosperity mainly driven by the resources and property sectors.
“However, forecasting a stabilisation of revenue in 2022-23 ahead of a small drop the following year, the state government has singled out the resources sector to further boost its future bottom line,” he said.
The resources sector was hit hardest in the budget announcements, with three new coal royalty rate tiers added to the existing top rate of 15%, now set to range between 20% and 40%.
Mohammad said Queensland was also reducing the phase-out rates for payroll tax deduction, opting to phase it out when Australian taxable wages exceed $10.4 million instead of $6.5 million starting January 01, 2023.
He said about 12,000 SMEs would welcome this expanded threshold.