Federal election 2019: Qld braces for impact of Labor’s property plan

Labor’s property tax plan has received a swift rebuke from Queensland property experts, who warn of the economic damage it would cause in the southeast and the state’s regions.

QUEENSLAND faces a tanking and two-tier housing market within nine months, after Labor shocked by unveiling a January start for its controversial capital gains tax and negative gearing overhaul.

Shadow treasurer Chris Bowen faced a swift rebuke from property experts in Queensland, who warned of the economic damage it would cause in the southeast and the state’s regions.

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Labor announced yesterday it would axe negative gearing concessions for new investors after next January.

It will remain for new properties to boost housing supply, and will be grandfathered for existing properties.

The capital gains tax discount will be halved for investors after January.

The plans will rake in $2.9 billion out to 2022-23 and $35 billion over a decade.

Nationally, more than 1.3 million people negative-gear. In Queensland the figure is about 250,000.

Real Institute of Queensland chief executive officer Antonia Mercorella told The Courier-Mail yesterday that it would be naive to think the abolition of negative gearing would only impact investors.

“The truth is that every single person in our community will be affected by this reform,’’ Ms Mercorella said.

“Investors are critical to the continued good health of the real estate rental market.

“More than 34 per cent of Queenslanders rent and this number is rising and the vast majority of rental properties are provided through mum-and-dad investors.”

Master Builders Queensland chief executive officer Grant Galvin said Labor’s plan would exacerbate the already depressed construction market in Queensland.

Queensland is staring down the barrel of a two-tier property market if a Labor government is elected.

“In addition to less capacity in the market, less construction also equates to less well paying skilled jobs and in most regional areas across Queensland, they can’t afford this to occur,” he said.

Property Investors Council of Australia chairman Ben Kingsley said Labor was gambling with the economy.

“All Queensland property owners now potentially have to deal with the consequences that if Labor win, based on the two-tier marketplace this policy creates, if they want to sell their property there may be less demand to buy it, making it worth less,” he said.

A SQM Research report released last week predicted homes would fall nationally between 5 per cent and 12 per cent by 2022 under Labor’s policy.

Mr Bowen tried to quell concerns yesterday.

“If you already use negative gearing, nothing changes. It’s not retrospective. And you can still use it for new houses,” Mr Bowen said.

He said Labor’s “Build to Rent” scheme would provide more long-term rental housing by giving tax breaks to investors such as super funds to invest in properties.

“With home ownership at 60 year lows, tax concessions on housing which favour wealthy investors over first home buyers will only make a bad situation worse,’’ Mr Bowen said.

“Labor has made the big calls and stuck to them, and we will continue to stand up for Australia’s aspiring first homeowners by reforming negative gearing from next year.”

Originally published as Federal election 2019: Qld braces for impact of Labor’s property plan