The Sunshine State’s developers will be forced to shoulder the burden of an increase to the “apartment killer” tax, which is being used to fund a tax concession.
Foreign Land Tax Surcharge is being increased to 3 per cent while the Additional Foreign Acquirer Duty will jump to 8 per cent in order to pay for a first-home-buyer concession.
Ahead of its June 11 Budget the Queensland Government announced an increase to the threshold for first-home-owner concessions on transfer duties from $500,000 to $700,000, which the Government said would enable 10,000 home buyers to get into the market.
According to the Government, the changes to transfer duty concessions would target first home buyers in the spectrum of the market where they are more likely to face affordability challenges.
To offset the demand from increased purchasing power for first home buyers with increased transfer-duty-concession thresholds, the Miles Labor Government has increased the foreign-investor land-tax surcharge to 3 per cent.
Queensland’s land-tax foreign-investor surcharge is lower than the other major states, with NSW and Victoria setting their surcharges at 4 per cent.
Transfer duty surcharge for foreign buyers is being brought into line with NSW and Victoria at 8 per cent.
The Property Council’s Queensland executive director, Jess Caire, said it was “a race to the bottom”.
“[The] announcement to lift the first-home-buyers ceiling and funding it through increasing the foreign land-tax surcharge is nothing short of a race to the bottom,” Caire said.
“It’s giving with one hand and taking away with the other—this will see first-home buyers and renters alike facing a more competitive and more expensive market.
“What’s the point of raising the concession if there’s no one to build it?”
Building approvals in Queensland grew fractionally in the Australian Bureau of Statistics data for April 2024 but the state’s building capacity is in sharp focus.
“Taxing the industry that delivers housing in a housing crisis is nonsensical—it’s like taxing water in a drought,” Caire said.
“No matter how this is packaged up—it’s a tax on housing. It’s a long bow to say we are now in line with NSW—they don’t tax companies, just individuals.
“This just sends a message that Queensland is not open for business.”
Premier Steven Miles said the move would give aspiring homeowners the chance to break into the market and own their own home.
“This is a real cost-of-living measure, that will also help deliver inter-generational prosperity,” Miles said.
“The concessions will put the dream of owning a first home within reach of more Queenslanders.”
The Queensland Government is believed to have collected $3.5 billion in transfer duty in the past three years
Deputy Premier and Treasurer Cameron Dick said foreign investors had “had a great run in Queensland”.
“But they compete with Queensland families for real estate, so it’s only fair that they contribute to helping more young Queenslanders into their first home,” Dick said.
“Our approach to revenue ensures tax relief is always offset, so we can continue to deliver services and infrastructure.”
REIQ chief executive Antonia Mercorella welcomed the news of the increased stamp-duty-concessions threshold, after a 15-year wait, but said it should go further.
“With Queensland having the lowest rates of home ownership of any state and declining first-home-buyer activity, a stamp-duty overhaul is critically important,” Mercorella said.
Mercorella said the REIQ would like to see the program extended to those who have been out of the property market for more than five years due to a change in circumstances.
Mercorella also raised concerns in relation to the increase in stamp duty for overseas investors.
“It seems counterintuitive that concessions are on offer for large overseas multinationals to take profits out of Queensland in the form of build-to-rent but those looking to invest in other products that provide supply are being punished,” Mercorella said.
“We believe it should be a level playing field for all.”