Treasurer stands by divisive land tax despite industry concerns

Industry leaders are warning the state government’s land tax will worsen Queensland’s housing crisis, but the Treasurer is standing firm on the move.

The state government has declared it will stand by its contentious land tax, as Treasurer Cameron Dick claimed the hike would not drive rental prices higher.

Industry leaders have consistently warned the plan to tax investors on property they also own interstate will further compound the housing affordability and availability crisis.

But Mr Dick stood firm by his assurance, with a spokesman referring to comments made by the Treasurer last week that “there was no substance to it all”.

“When interest rates were at record lows, did anyone see rents go down in Queensland?” the Treasurer said last week.

“Of course they didn’t. That’s just an absolute furphy.

“There’s no substance to that at all. Rents are based on supply and demand.

“That’s how the market works. That’s how rents are determined.”

Queensland Treasurer Cameron Dick. Picture: NCA NewsWire/Dan Peled

The Queensland Council of Social Service supported the Treasurer’s view but a leading commentator, AMP Capital chief economist Shane Oliver, said it was “basic economics” that a tax increase on investors would be passed on to the tenant.

Dr Oliver said the multi-jurisdictional land tax, to be introduced next year, would also serve as a disincentive to invest in Queensland, which would further decrease the available stock on the market.

“Investors will try to recoup their higher land tax bill from tenants and, more importantly, there will be a smaller investor base which potentially effects the supply of property in Queensland,” he said.

Industry leaders and stakeholders pledged to lobby the state government to repeal the tax at Friday’s roundtable ahead of the housing summit on October 20.

Property Council Queensland chief executive Jen Williams. Picture: NCA NewsWire/John Gass

However, the Treasurer told reporters their concerns were only raised in relation to a federal affordability support initiative.

“The only mention of land tax today, the only mention today at the roundtable, was in relation to properties that were formerly part of the National Rental Affordability Scheme, so no one raised closing interstate land tax loophole as an issue in relation to affordability,” he said.

But three separate figures contested this remark, with Property Council Queensland chief executive Jen Williams insisting land tax “was mentioned in various forms throughout the conversation”.

“It was in terms of build-to-rent, it was in terms of the interstate land tax model,” she said.

“People raised it through the Ment.io conversation (digital discussion board) but people were also very aware of the room in which they were sitting and were respectful that other people wanted to raise other issues as well."

Real Estate Institute of Queensland chief executive Antonia Mercorella. Picture: Jamie Hanson

Real Estate Institute of Queensland chief executive Antonia Mercorella said all groups invited to the roundtable were concerned about the broader issue of the housing crisis and focused on listening to each other’s perspectives.

“But I’m comfortable saying the issue of the right taxation settings was raised to ensure that we’re encouraging investment,” she said.

“That was absolutely raised.”

Meanwhile, the Urban Development Institute of Australia said it included “recommended solutions presented at the roundtable table”.

This included a “three-year moratorium on legislative and regulatory changes that have an impact on housing affordability or development feasibilities, including a raft of government-initiated reviews relevant to our industry, to provide investment certainty and stability”.

The UDIA said this spoke directly to the land tax but a spokesman for the Treasurer said it would need to be repealed given it has already been legislated in parliament.