How Labor’s foreign taxes are ‘killing’ Qld housing

Foreign-investment-killing property taxes have cut 33,000 new homes from Queensland’s housing supply and created a $100m budget black hole, analysis reveals.

Premier Steven Miles and Jess Caire Queensland Executive Director Property Council of Australia. Picture: David Clark

Foreign investment-killing property taxes have cut 33,000 new homes from Queensland’s housing supply and created a $100m budget black hole, the Property Council of Australia has declared.

The damning research will be released on Tuesday and reveal, eight years after the state government introduced a foreign buyers’ surcharge and foreign owner land tax, that international capital has plunged 84 per cent – and some 33,000 homes were never built.

PCA chief executive Jess Caire labelled the government’s approach to foreign investment as “shortsighted and small-minded”.

She noted Australian businesses which sought to use foreign cash to build property, or had a 51 per cent foreign shareholder, were slapped with the duty and tax.

“These apartment-killer taxes were sold to Queenslanders as a solution to a perceived influx of overseas buyers looking to crowd them out of housing, but in reality, they’ve put the handbrake on housing delivery altogether,” Ms Caire said.

“These ill-considered taxes have only worsened Queensland’s housing issues by driving away the global capital that backs Australian-based developers who deliver new homes at scale and bring community- building projects to life.”

Premier Steven Miles. Picture: David Clark

The 84 per cent fall in international investment has also resulted in the state losing about $17.8bn in housing investment, up to 38,000 jobs and $100m in stamp duty and land tax revenue.

Treasurer Cameron Dick raised the foreign owner land tax surcharge from 2 per cent to 3 per cent in the June budget, noting it was “still more generous than New South Wales and Victoria”.

It is expected to raise $360m to fund cost-of-living relief for Queenslanders.

Ms Caire argued it “exacerbated the state’s housing crisis”.

“Many of the companies that rely on international capital to fund their projects are household names, have been based in Queensland for decades, and employ thousands of Queenslanders,” she said.

“It’s no wonder boardrooms around the country, and the world, are looking at Queensland and shaking their heads in disbelief, because despite all the potential, the state’s tax settings are effectively a big ‘You’re not welcome’ sign to ­institutional capital.

“Queensland is sometimes unfairly viewed as behaving like a regional town, and taxes do nothing to dispel that.”

Mr Dick in July pledged to review property taxes, but Ms Caire warned it could be a “trojan horse” for more taxes.

“If we want to take the next step as a global city, we need to become more welcoming of the capital and ideas that support growth,” she said.

Originally published as How Labor’s foreign taxes are ‘killing’ Qld housing