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A removal of stamp duty would see more Queenslanders consider downsizing or “rightsizing”, according to the state’s real estate institute CEO.
As well as leading calls for stimulus of the established housing sector, Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said more needs to be done to protect the state’s property market, which is at risk from a pause in immigration, rent reductions, mortgage deferrals and high unemployment.
It’s why she is calling for the Queensland government to remove stamp duty and instead implement a broad-based land tax.
She flagged that established home sales are now outpacing new listings, which means buyers are back out in force and ready to purchase property.
“However, sellers are really yet to follow,” Ms Mercorella conceded, explaining how property sales plummeted as physical distancing restrictions forced a temporary halt on open homes and onsite auctions.
“We’ve done remarkably well to maintain relatively stable property market conditions across Queensland throughout this pandemic, but these conditions won’t last if we don’t have more sellers back in the market and the best way to do this is via rightsizing.”
She cited the state Treasury analysis that has revealed as many as 50,000 properties are underutilised every year across Queensland.
According to the REIQ, much of this can be attributed to people living in their homes years longer than is suitable for their stage in life.
While ageing in place is one reason for this, the institute has also observed high transactional costs as a key deterrent for prolonged property hold.
“More often than not, retirees who plan to sell the family home buy something smaller and live off what’s left [and] are thwarted by the distorting effects of stamp duty alongside other costs associated with buying and selling,” Ms Mercorella commented.
The CEO said “nowhere is real estate more fundamental to the health of an economy than in Australia, which is why the Queensland government needs to replace stamp duty with a broad-based land tax, with immediate transfer exemptions for those aged over 65 years”.
By making downsizing an easier financial decision for older Queenslanders, Ms Mercorella said the state could see a significant increase in stock listings and generate much-needed economic activity.
“It’s a win-win all around,” she said.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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