The Queensland government coffers are swelling from excessive property taxes and it’s time they started to wean off them, according to the Real Estate Institute of Queensland (REIQ).
According to the Australian Bureau of Statistics (ABS) stamp duty now accounts for 25 per cent of the tax base for the Queensland Government – up from 20 per cent 10 years ago.
Property taxes, including both stamp duty and land tax, have risen 133 per cent over the past 10 years, equating to an additional $4.2 billion per year.
REIQ Chief Executive Officer, Antonia Mercorella, said that given the sharp increase and the fact the state was still in the grip of a housing crisis, despite the record haul, it was time to reset reasonable parameters of property tax.
“Over the past five years, Queensland has recorded the highest growth in property taxes of any state,” Ms Mercorella said.
“Even with Victoria increasing taxes on property such as windfall gains tax in that period Queensland is still taking the cake for escalating tax take.
“Despite record revenue and announcements relating to housing, it’s insulting and ironic that very little is being reinvested back into building social housing – with only 56 completed last year, the lowest on record and the lowest of any state.”
Ms Mercorella said Queensland’s property taxes may target home buyers and property investors, but they had a flow-on effect to everyone and the economy.
“Over the last 12 months, Queensland had the lowest proportion of first-home buyers of all mainland states for all purchases and owner-occupiers,” she said.
“Stamp duty is a financial hurdle that can add years to home buying timelines, keeping people in the rental market for longer, and also deters empty nesters from downsizing creating utilisation inefficiencies in our existing housing stock.
“While ongoing and escalating land tax costs are inevitably partially passed on to renters in order to ensure investments still stack up and remain sustainable.
“It’s clear our state’s antiquated property tax system is no longer fit for purpose, and this unhealthy addiction to new highs of property revenue must be tapered and kept in check.”
The REIQ continued to call for the indexation of land tax to make it fairer, Ms Mercorella said.
“The threshold has been set at $600,000 since 2007, so it’s well overdue to readjust the value at which land tax applies,” she said.
“While we’ll keep advocating for stamp duty to be completely overhauled, a sensible interim measure would be to lift the stamp duty concessional threshold for first home buyers to $800,000 to reflect modern-day prices.
“We understand that thresholds need to be set, but equally there needs to be a mechanism in place to review them.
“At all points in property transactions, some level of government, whether it be state or federal, is also going along for the ride and reaping the benefits too – they all stick their fingers in the property pie, and concerningly that makes for a much less appealing meal.”
