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Industry bodies are lobbying for an independent review into Queensland’s “investment-killing” property taxation policies.
Recent findings from the Property Council of Australia have revealed that Queensland has lost out on 33,000 new homes and up to 37,000 jobs as a result of the state government’s introduction of property policies eight years ago, which have hindered investment in the state.
Independent research from the Queensland Economic Advocacy Solutions (QEAS) presents eight years of evidence showing that the state’s property taxation policies on international capital – which were made more stringent in this year’s state budget – have worsened Queensland’s housing crisis.
These taxes take the form of Queensland’s Additional Foreign Acquirer Duty (AFAD), now an 8 per cent surcharge on stamp duty, and the Foreign Land Tax Surcharge (FLTS), now a 3 per cent surcharge on land tax that foreign investors have to pay on top of being taxed at a federal level.
Executive director of the Queensland division of the Property Council of Australia, Jess Caire, commented that these taxes, which were initially presented to alleviate perceived concerns around overseas buyers crowding out Queensland residents, have in reality “put the handbrake on housing delivery all together”.
“These ill-considered taxes have only worsened Queensland’s housing issues by driving away the global capital that backs Australian-based developers who deliver new homes at scale and bring community-building projects to life,” Caire said.
“The almost 33,000 homes that could have been built over the last eight years would be more than enough to house the population of Rockhampton,” she added.
The CEO of the Real Estate Institute of Queensland (REIQ), Antonia Mercorella, voiced similar concerns, expressing that the state’s taxes “effectively close the door on being able to access foreign funds”.
“These punitive measures rob capital from local builders and developers who are instrumental in delivering new housing supply and this leads to downward pressure on approvals and shortfalls in housing,” Mercorella said.
The report also showed that total international investment in Queensland has dropped 83.9 per cent since the introduction of the taxation policies in 2016, resulting in the state losing out on an “estimated $17.8 billion in housing investment and between 21,129 and 37,972 Queensland jobs”.
Further amplifying these losses, Caire noted that the state has also lost out on revenue of almost $100 million in stamp duty and land tax since these taxes were first introduced.
The CEO also emphasised that many of these companies which rely on international capital to fund their projects “have been based in Queensland for decades, and employ thousands of Queenslanders”.
“So not only have these taxes killed off homes, but they’re also killing off Queensland jobs,” she stressed.
With the Property Council previously welcoming the Queensland Treasurer’s announcement of a tax review in July of this year, Caire expressed it was “disheartening” to see no further “follow up or engagement with industry” on this measure.
Caire highlighted this lack of consultation as doing “little to boost confidence or build trust” and expressed concern that this precedent would become a “Trojan Horse for more taxes on the industry, with little heed of the consequences”.
“It’s disappointing to have one arm of government focused on fast-tracking planning and housing supply – and delivering more initiatives than ever – only to have the other arm twisted behind their back by Treasury,” she said.
To address the state’s constrictive taxation policies, the Property Council called upon the Queensland government to commit to a tax review that will:
- Be undertaken independently of Treasury, and chaired by an independent tax expert.
- Involve appropriate peak bodies to establish the Terms of Reference.
- Include a commitment to no new or increased taxes or charges across the entire property sector.
Caire emphasised that for Queensland to “take the next step as a global city, we need to become more sophisticated and welcoming of the capital and ideas that support growth and better living”.
“We are simply asking for a fair go for these Australian-based companies, so they can get on and do what they do best – funding job-created local projects and producing new homes – particularly for the 30 per cent of Queenslanders who rent,” she said.
This sentiment was echoed by Mercorella, who reiterated the need for an independent review into the state’s property taxation and charges to be conducted outside of parliamentary influence and published each year as part of the budget process.
“We renew our calls and echo those of the PCA asking for Treasury to ensure an annual, truly independent tax review process with proper industry engagement,” Mercorella concluded.
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