‘Word of warning’ as granny flats plan to ease Qld housing crisis is questioned

As the state government spruiks its granny flats policy that would “house thousands of Queenslanders”, it admits it does not know how many such flats are sitting empty.

Homeowners have been warned to investigate the potential land-tax implications of a new government policy urging them to rent out vacant granny flats to help ease the state’s housing crisis.

Deputy Premier Steven Miles and Housing Minister Leeanne Enoch announced on Friday emergency planning changes to remove restrictions on homeowners renting out secondary dwellings on their properties, which they claim was expected to “house thousands of Queenslanders”.

But Ms Enoch admitted the government did not know how many granny flats were sitting empty in Queensland, while spruiking the new “housing crisis” policy.

“Obviously that is a number that we’re all looking forward to finding some information about,” she said.

Asked whether the government could really claim “thousands of Queenslanders” would benefit, Dr Miles said “anecdotally” the government had “heard a lot of stories about people who have these (units) and would like to rent them out”.

The Deputy Premier also backed controversial changes to Queensland’s land-tax laws but struggled to answer whether homeowners opting to take up the state government’s new push to rent out granny flats could be slugged extra tax, saying “I’m not a tax adviser”.

Real Estate Institute of Queensland chief executive Antonia Mercorella issued a “a word of warning” on the new policy, saying it was important for homeowners to investigate potential tax implications, including capital gains tax and land tax.

“We’re still seeking clarification around how the new land-tax regime will impact granny flats and the availability of the Principal Place of Residence exemption,” she said.

“We encourage the Queensland government to provide clear education around tax implications for those who are interested in renting their secondary dwelling.”

Minister for Housing Leeanne Enoch and Deputy Premier Steven Miles on Friday. Picture: NCA NewsWire/John Gass

Dr Miles is the latest minister to back the state’s change to land-tax legislation – which will see, for the first time, the value of interstate property used to calculate the rate of tax owners pay – despite economists and real estate experts saying it could drive investors out of Queensland, and push up rents.

On what the land-tax implications of the announcement could be, Dr Miles said it would “depend on the arrangements”.

“There is certainly no intention for this to be revenue-raising in any way,” he said.

“I’m not a tax adviser, but my understanding would be if that property remained their principal place of residence then that would continue to be so.”

Under Queensland’s land-tax exemption for homes, it states an “allowable letting” – meaning a dwelling not subjected to land tax – cannot be more than 50 per cent of the total floor area of all the residential areas on the land.

People could also be caught out if there was more than one lease on their land, with other restrictions on what is an “allowable letting”.

A tax partner at major accounting firm BDO, Leisa Rafter, called on the government provide information and certainty to homeowners relating to the tax implications related to leasing out their granny flat.

“Although the homeowners’ residence may remain exempt, the land-tax exemption is not straightforward,” she said.

LNP treasury spokesman David Janetzki. Picture: NCA NewsWire/Dan Peled

LNP treasury spokesman David Janetzki said it appeared Dr Miles and Treasurer Cameron Dick – a staunch supporter of the new land-tax arrangements – were working separately and at cross purposes.

“In the middle of the worst housing crisis in Queensland’s history, we need stable and considered policymaking,” he said.

“The Deputy Premier and Treasurer need to be working together to find the appropriate policy settings.

“The housing crisis is too serious to let internal state politics get in the road of solutions.”

Asked whether repealing the land-tax changes would help Queenslanders more than the planning changes, Dr Miles said “this measure (the change to granny flat restrictions) we hope, will unlock thousands of homes”.

“Those property holders who have been exploiting a loophole by buying properties in other states, that incentive to buy those properties in other states will be removed,” he said.

“This is not a new tax; it’s an adjustment to how the threshold is calculated.”