Housing crisis: State Gov’s $3.5bn tax grab as Qld families struggle

Queenslanders are spending nearly the first decade of their mortgage paying off hundreds of thousands of dollars in government taxes, fees and charges, new research has revealed.

Queenslanders are spending nearly the first decade of their mortgage paying off hundreds of thousands of dollars in government taxes, fees and charges, new research has revealed.

As home ownership becomes increasingly out of reach for Queenslanders, new research by the Property Council has revealed a third of the cost of a home or unit is going toward charges including stamp duty, land tax, council rates and GST.

The reality of the staggering tax burden has reignited calls for the Miles government to undertake a review of its stamp duty and other tax settings or risk making housing unaffordable and uneconomical to build.

The research comes months out from a state election where housing is expected to be a key issue, with Queensland currently the state with the lowest rate of homeownership across every age bracket.

Property Council Queensland executive director Jess Caire said property might be the government’s “cash cow” now, but a failure to stimulate investment through tax relief would ultimately see the money dry up.

Property Council Queensland executive director Jess Caire. Picture: David Clark.

“If there’s no new apartments coming online (because) people can’t get them to stack up or new house and land packages coming online, then where are they going to get their land tax and stamp duty from long term?” she said.

And further research commissioned by the Property Council shows the state government has reaped $3.5bn above and beyond what they expected to make in stamp duty in the last three years.

Overall stamp duty – or revenue gleaned by the government when property is bought or sold – has been worth about $17bn in the last three years.

Housing Minister Meaghan Scanlon however, questioned the accuracy of the council’s analysis, saying that Queenslanders don’t pay income tax on purchases.

“There are some problems with the Property Council’s analysis, for example you don’t pay income tax on housing purchases. What I will say more broadly is that Queensland has the lowest property taxes in the east coast,” Ms Scanlon said.

“We’ve already announced a doubling of the first home owners grant and we’ve also the first state in the country to introduce laws that will help low and middle income earners get into home ownership.”

“As I said, we will continue to look at other revenue measures and how we can make it easier for people to buy into the market,” she said.

“We are not cutting taxes for foreign investors, we’ve ruled that out before and we will continue to roll that out because we think foreign investors if they want to invest here they should pay their fair share.”

Housing Minister Meaghan Scanlon questioned the accuracy of the Property’s Council’s analysis. Picture: Steve Pohlner

Ms Scanlon said the government will “always look at other revenue measures as part of the budget and make announcements in June.”

“Tax collected by the Queensland government goes back out in the form of infrastructure and service delivery, so we are spending way more than $3.6bn on delivering infrastructure in state schools, hospitals, homes and roads,” Ms Scalon said.

“We are already investing taxes we receive into building more homes, into incentives, just yesterday I announced a $350m million Incentivising Infill Development Fund.”

The Property Council is now calling on the state government to “quarantine” the extraordinary windfalls flowing into its coffers from property-related tax and put it into a “transparent” growth fund dedicated to delivering projects the state needs.

“As Queensland grows there will undoubtedly be property-related tax income raised from that growth. It’s important Queenslanders have visibility on how much is being raised and how it is being reinvested to support that growth,” Ms Caire said.

It comes as Premier Steven Miles, addressing property players on Friday, spruiked the government’s newest measures to “build more homes faster” through cutting red tape, making the approvals process smoother and providing funding for trunk infrastructure.

Mr Miles was coy on any stamp duty or land tax changes scheduled for the budget, and did not rule out committing to a review of the thresholds before the election.

Premier Steven Miles speaks at the Property Council of Australia Queensland branch luncheon. Picture: David Clark.

“The challenge for us is every dollar that we collect in those taxes we use to build the roads and infrastructure that everyone wants us to build … so if we reduce one of them, we need to find ways to do less of those things or increase other (taxes),” he said.

Opposition Leader David Crisafulli said if the LNP are elected in October they will commit to lifting the stamp duty threshold for first homebuyers.

“That’s our commitment, to make sure that young people can dream of owning a home again,” Mr Crissafuli said.

As it stands, the first home concession only applies to a home valued under $550,000 and can save you up to $15,925. The home concession may still apply for a home valued over $550,000.

Mr Crisafulli said the threshold remains too low and is committed to lifting that as part of his budget reply speech in a few weeks.

“At the moment one of the great impediments of getting them into the market is the fact that they are paying for stamp duty because of bracket creep over the years. At $600,000 that threshold remains too low and we are committed to lifting that and I will be doing that as part of my budget reply speech in a few weeks.”

Mr Crisafulli said he is also committed to bringing Queensland from last to first when it comes to the state’s homeownership figures.

Property Council Queensland’s research shows 32 per cent of a new house and land package in a Brisbane greenfield site was taxes – equating to $233,440 in taxes on a $730,000 mortgage.

Apartments are also impacted, with a homeowner forking out $205,301 in taxes on a $617,000 mortgage.

Ms Caire said taxes were critical to providing the projects and services Queensland needed but it was important to balance the need for more revenue with the need for more housing.

“It’s an extraordinary finding and, at a time when Queenslanders are struggling to put a roof over their family’s head, it shows how government can tackle the housing crisis head-on – by reducing these taxes,” she said.

Anna Ellis pictured with her husband Stuart Ellis and their daughter Zoe (5). Picture: David Clark.

Anna and Stuart Ellis were hit with stamp duty fees in excess of $100,000 for their Brisbane fixer-upper.

The couple, who are currently renovating their Kangaroo Point Queenslander, said that stamp duty ultimately decreased their “purchasing power”.

“Like most people, stamp duty is paid from savings – and not added to the loan – so it reduces the deposit available for the house,” Mrs Ellis said.

“It feels like an extortionate amount to pay, and it feels quite unfair that it is not a fixed fee.

“We have a young family and that amount of money could have gone a long way in paying for our everyday living costs.

“We are also doing a renovation, and would have loved to put that toward the house.”

The Property Council is calling for the state government to increase first homeowner grant thresholds, giving apartment buyers one-off stamp duty concessions to increase pre-sales and review “outdated” stamp duty and land tax thresholds among other recommendations.

Queenslanders buying their first home can apply and pay no stamp duty for residences under $500,000, with reduced concessions for properties priced under or slightly over $550,000 – though the median house price in Brisbane is now $845,000. The $500,000 ceiling has not been reviewed since 2008, the same year the first Apple iPhone was released in Australia. It was revealed this year the number of Queenslanders able to access first home stamp duty concessions had dwindled to its lowest levels in a decade.