Queensland ditches controversial land tax
Queensland Premier Annastacia Palaszczuk has stepped in and scrapped the state’s controversial land tax proposal, which would have slugged investors nationally for owning properties interstate.
In a major turnaround, Queensland’s state government has pulled the plug on planned changes to a land tax that would have slugged landowners who also owned properties interstate.
The tax had been widely lambasted as unworkable, unfair for renters and investors alike, and a hindrance on much-needed investment in rental supply.
Friday’s (30 September) policy reversal comes after the proposal was criticised by the state opposition and other premiers.
Liberal National treasury spokesman David Janetzki labelled the backflip as an “economic embarrassment of epic proportions”.
Its announcement in the December budget update was met with horror by investors and apparent amusement by other states who were refusing to hand over the personal data of their state’s property owners.
Under the proposal, the value of investment properties across the country would be taken into account to calculate land tax rates paid according to Queensland's thresholds. That rate would then have applied to the properties in Queensland.
API Magazine exclusively reported in August that issues over its workability could prove insurmountable.
The Real Estate Institute of Queensland (REIQ) congratulated the state government for not proceeding with its controversial new land tax regime.
REIQ CEO Antonia Mercorella the proposed land tax reforms could have damaged property investor confidence at a time of the tightest vacancy rates in history.
“Abandoning the contentious land tax regime will bring confidence back to the property investor market in a time of great uncertainty,” she said.
“To send shockwaves through the private housing investment market during a rental crisis was unprecedented and illogical.
“The land tax changes would have also potentially impacted commercial property investment and national employers with Queensland domiciled premises.
“We appreciate the government’s move to shelve this retrograde tax reform and look forward to working with them at the Housing Summit in October to address the state’s housing supply issues.”
The decision was also seen as timely by many industry observers, coming on the same day the Productivity Commission’s review of the National Housing and Homelessness Agreement (NHHA) addressed the country’s affordability issues.
“The NHHA is intended to improve access to affordable housing, but it is ineffective. It does not foster collaboration between governments or hold governments to account. It is a funding contract, not a blueprint for reform,” Commissioner Malcolm Roberts said.
“Over the life of the NHHA, housing affordability has deteriorated for many people, especially people renting in the private market. The median low-income renter spends over a third (36 per cent) of their income on rent. About 1 in 5 low-income households are left with less than $250 after paying their weekly rent.
“With the private market becoming less affordable, demand for homelessness services and social housing is rising.”
Mr Roberts said a two-track approach was needed to ease the pressure on low-income renters — the capacity for low-income renters to pay for housing needs to be improved and constraints on new housing supply need to be removed.
The $5.3 billion Commonwealth Rent Assistance program should be reviewed, he said.
“There is a strong case to improve its adequacy and targeting (and) at the same time, state and territory governments should commit to targets for new housing supply and accelerate planning and other reforms.”
“The Commission is recommending the new NHHA have a greater focus on coordinated policy action across jurisdictions, homelessness prevention and early intervention, and Aboriginal and Torres Strait Islander housing.”