Queensland Treasurer Cameron Dick unveiled the 2024-25 Budget, a mixed bag of cost-of-living relief and new taxes targeting the property industry.
One of the key highlights is the increase in transfer duty concession thresholds for first-home buyers.
The ceiling has been raised from $500,000 to $700,000, with partial concessions available up to $800,000.
This measure aims to make homeownership more accessible for first-time buyers, costing the state $90 million per year.
To fund these concessions, the budget imposes higher taxes on the property industry.
The Additional Foreign Acquirer Duty (AFAD) will now be 8%, and the Foreign Land Tax Surcharge (FLTS) will rise to 3%.
These increases are expected to generate $422 million over the forward estimates.
Notably, these taxes apply to Australian-based developers with 50% or more international ownership or investment.
Jess Caire, Executive Director of the Property Council of Australia Queensland, criticized the decision to increase taxes on investors with international funding.
She warned this move could severely impact Queensland’s apartment stock.
Caire commented:
“Queensland needs more homes built faster, and targeting the companies that build these homes is beyond comprehension.
Research shows no new apartments are planned for Brisbane beyond next year, and today’s budget will only widen this gap indefinitely.
These companies are vital to our housing system, but this new tax could be the final nail in the coffin.”
Impact on renters and housing supply
Caire emphasized that taxing these companies will likely lead them to invest elsewhere, exacerbating the housing shortage.
“Queensland families looking to rent will be hit hardest. More taxes mean fewer investors, which translates to fewer new homes”, she said.
While the increase in first-home buyer concessions is a positive step, Caire noted that these benefits are undermined by the higher taxes on developers.
She further explained:
“Giving with one hand and taking with the other doesn’t help anyone.
We need more investors to build new homes.”
Long-term consequences
The Property Council’s modelling suggests the state government may fail to deliver on its promise to provide a home for every Queenslander.
Caire pointed out that this is the tenth tax increase on property since 2016.
The process for obtaining concessions on these taxes is cumbersome, often taking over 18 months.
Caire called for negotiations to exempt Australian-based developers with significant international ownership who deliver homes and student accommodation.
She said:
“What Queenslanders should be asking is, what does this cost us in terms of housing?
Our early modelling suggests we’ve already lost tens of thousands of homes worth billions due to these taxes.”
Meanwhile, Premier Steven Miles reiterated the government’s commitment to delivering one million more homes:
“We want young Queenslanders to have the opportunity to own their own place.
That’s why we’re increasing the first home buyer concession threshold.”
Pre-announced Budget initiatives for the property industry included:
- $350 million for the Incentivising Infill Development fund
- $8.2 million for the ShapingSEQ 2023 Plan
- $11 million for construction industry skills and the continuation of the 50% apprentice and trainee payroll tax rebate
