As part of its pre-election pledge to increase taxes on the rich, Labor Treasurer Curtis Pitt said the government would add $2 to the transfer duty cost of a new car costing more than $100,000, adding thousands to the cost of such cars and raising an extra $25 million a year for the state’s purse.
"If you can afford a $100,000 vehicle, you can afford to pay your way," Pitt told the Brisbane Times.
The surprise move drew the ire of the Federal Chamber of Automotive Industries – the group that represents the interests of the Australian-based outposts of global manufacturers selling cars here.
“There was no consultation with the FCAI nor its members on the detail of this announcement,” FCAI president Tony Weber said. “Governments seem to think of motor vehicles as the golden goose.
“The fact is motor vehicles are already heavily taxed in Australia. The imposition of GST, stamp duties, registration fees and the ongoing related taxes including fuel excise, are all hitting consumers hard.”
The FCAI said government taxes now made up around 20 percent of a new car’s price.
The impact that the government’s proposal will have on a $100,000 car varies according to how many cylinders it has under the bonnet – and whether it also carries an electric motor.
Electric and hybrid cars currently attract a registration duty of $2 for every $100 of value, meaning the duty on a $248,500 petrol-electric V6 Porsche Panamera Hybrid under the new scheme will increase from $4970 to $9940. Likewise, for a $109,611 four-cylinder Mercedes-Benz E300 sedan, which attracts a $3 rego duty, the tax slug will jump from $3228 to $5481. Five- or six-cylinder cars will jump in duty from $3.50 per $100 of cost to $5.50.
But it’s V8 buyers who will suffer the biggest hit. They currently pay $4 per $100 in duty, with the $290,512 cost of a Jaguar F-Type SVR shaping up to attract $17,431 in rego fees compared with a more modest pre-hike slug of just $11,620.
Like the GST, it’s not just the list price of the vehicle. Stack on a few choice optional extras, and the duty bill will soar even higher. It also means Queensland buyers shopping around under the $100,000 mark – say for a $99,900 M2 – would need to be careful that their keenness to personalise their ride won’t push the cost above the $100,000 ceiling.
Meanwhile, the Queensland government has announced it will not introduce new taxes for foreign property investors who buy a house in Queensland.
“In the lead-up to the election we made it very clear that we wanted to provide certainty to businesses and investors, and that we would not be changing the existing revenue policy settings this term of government,” Pitt said.
“Therefore, we’re ruling out any stamp duty surcharges for foreign investors who purchase a house in Queensland.
“We’re also ruling out any land tax surcharge for foreign investors in this state.”