DESPITE having a tax on foreign investors owning agricultural land in the State, Queensland is next year hosting the Global AgInvesting event in Brisbane, which brings together experts in primary industries, private equity and institutional investors, and leading agribusiness executives.

It is the first time the event is being held in Australia with annual events typically held in New York, Tokyo and London.

Qld is the only state to have the tax, which sees a 3 percent surcharge applied to land tax on land owned by foreign companies and foreign entities.

Beef Central has been told the tax is deterring foreign investment in agriculture in Qld.

Consolidated Pastoral Company is Australia’s largest privately owned cattle company, owned by the UK’s Guy and Julia Hands.

“For us in 2025 it will be $1.8 million that we will need to pay just across our three properties in Qld,” said CPC CEO, Troy Setter, told a recent edition of Beef Central’s Weekly Grill podcast.

“You look at returns in cattle in Qld in the last four plus years – it’s about a 3pc cash return and the last two years has actually been a loss.

“So it just about chews off all of your margin and for us that is money we can’t spend in capital expenditure and further investment in our properties in Qld.”

Beef Central understands the tax was introduced to deter foreign investors buying housing in the south-east of the state, to try and address the housing crisis.

But it had unintended consequences for rural properties and is now scaring investors away.

The Weekly Grill was told by one rural participant ‘there would be a tsunami of foreign owned properties being offered on the market soon’, something Troy Setter has started to see.

“We have seen several of our peers stop investing in Qld, and they were large investors in Qld, a couple of them are divesting their properties,” said Mr Setter.

“Quite a few (properties) have been offered to us, it surprised me that there would be that many.

“We have seen quite a few larger ag companies, and most of them have a fair bit of Australian equity in them, and some are majority Australian equity and have a small amount of foreign capital, who are now investing in New South Wales.

“It is disappointing, we have seen some generational succession change going on at the moment and there are several companies who would be genuine bidders, who won’t be bidding (because of the surcharge), which will impact family succession for a lot of Qld properties that are on the market.

“But people are saying if the tax is 3pc, and my cash return is only 3pc and the volatility of the cattle market has been about 30pc in the last two years, it is just not worth the risk anymore.”

Mr Setter said he would like to see the surcharge removed or for an agricultural exemption to be applied.

“Removing some of these taxes would stimulate more investment in Qld and that is what we need – more investment, not less with tax money coming in,” he said.

Beef Central has been told one solution that would not require legislative amendment would be to amend the ex-gratia relief guidelines to extend relief to stapled structures and investment structures with less than 100pc foreign ownership (to encourage foreign investors partnering with local landowners).

“The taxation settings in Qld will be more consistent with all other Australian jurisdictions with respect to primary production assets, preventing a distortion of the Qld market and enhancing Qld’s ability to attract foreign investment,” Beef Central was told.

While AgForce does not have a position on the foreign land tax, its CEO Michael Guerin said finding ways to make farming more affordable for the next generation was a priority for the rural lobby group.

“Tax and wider reform continue to provide rich opportunity for industry in Australia.  A foreign land tax consideration is an important component of that broader reform opportunity,” said Mr Guerin.

The Queensland Government has been contacted for comment.

The foreign land tax surcharge will be the focus of the next Queensland Rural Press Club event on 17 July.