State elections are coming our way in October, and as is to be expected the election promises are starting to come thick and fast. A recent one by the Deputy Premier, Treasurer, and Minister for Trade and Investment of the Queensland state government, Cameron Dick, may be well-intentioned but has a lot of people in the real estate industry scratching their heads.
He’s basically indicated that there will be a major overhaul of the housing taxes in Queensland, with a view to improving housing availability. In the media release, which you can read here, Mr Dick says this:
“Given that housing availability will continue to be a challenge for any future Queensland Government, as requested by the Property Council, this review would be conducted after this year’s State Election, with its results to be considered as part of the 2024–25 Queensland Budget.”
The aim is to find a way to bring about “long-term improvement of economically sustainable housing supply”. Given current housing market constraints, now is the right time to develop and undertake a review of the impact that state taxes and charges have on housing supply and the property sector, Mr Dick says.
But is this the right time to do this? Real estate industry heads worry that something like this could destabilise the property market, and that the announcement was ambiguous in nature. Let’s take a look at some reactions.
Reaction to the Real Estate Pledge
The Real Estate Institute of Queensland
Let’s start with the Real Estate Insitute of Queensland had to say. REIQ CEO Antonia Mercorella said the peak body for real estate is cautiously supportive of the review, although they do have reservations. Here’s what she said:
“It’s promising that the goal of increasing housing supply has been identified as the focus of this review into state-based taxes and charges for the housing market. However, we know that ambiguous announcements such as these can rattle the confidence of the investment community and destabilise the property market.”
“Ahead of the review which will look at potential reforms, we are calling for a commitment from the State Government to not impose any more new or increased property taxes on investors, owner occupiers, small business or developers. The property market thrives on stability and predictability, so this assurance of no new property taxes would go a long way to help restore investor confidence in the interim.”
Ms Mercolla has solid points here. We’ve actually seen elections that were arguably lost on real estate pledges (remember Bill Shorten?), so we know that changes or proposed changes can have massive impact. It would be unfortunate if those impacts were to involve negative investor confidence. As she says, stability is key to a thriving real estate market.
Property Council of Queensland
The new boss of the Property Council of Queensland, Jess Caire, welcomed the announcement from Mr Dick, but said collaboration and consultation must be at the heart of the review. She said:
“What we don’t want to see is increased taxes across other property sectors or any new taxes levied on the industry. Taxing the very industry that delivers the homes, critical infrastructure, offices, shops, and industrial developments our state needs within an inch of its life is counterproductive.”
Both the Property Council and REIQ shared reservations, and both seemed to agree that any review should be conducted independently. That way it won’t be subjected to parliamentary influence.
That seems fair to us. Housing supply and the real estate industry go hand in hand, so we feel extensive consultation with industry heads should also be on the cards.
Recent Property Tax Increases
This proposed overhaul of housing taxes comes hot on the heels of the new taxes targeting the property industry in the State Government’s 2024-25 budget. In an effort to make home buying more accessible for first-time buyers, the budget raised the transfer concession ceiling from $500,000 to $700,000, with partial concessions available up to $800,000.
In order to fund the cost this would impose on the state, taxes were introduced on the property industry. Australian-based developers with 50% or more international ownership/investment saw the Additional Foreign Acquirer Duty (AFAD) rise to 8%, while the Foreign Land Tax Surcharge (FLTS) rose to 3%.
With that in mind, is the property industry ready for even more taxes?
Let’s Talk Real Estate
If you’d like to talk about any of the above developments in the real estate industry in Australia, or have particular questions about Brisbane real estate, The Henry Wong Team® is here to help. We live and breathe real estate, keeping our finger on the pulse of the latest news in the market. Please get in touch with us to have a chat, or give Henry a ring directly on 0412 471 588.
