Queensland Government urged to curb reliance on property tax amid housing crisis

New data from the Australian Bureau of Statistics (ABS) has revealed the Queensland Government’s significant increase in property tax revenue over the 2022-2023 financial year, despite the state grappling with a housing crisis.

According to the data, which excludes coal royalties, stamp duty now accounts for 25 per cent of the State Government’s tax base, up from 20 per cent a decade ago. Moreover, property taxes, including stamp duty and land tax, have risen by 133 per cent over the past ten years, equating to an additional $4.2 billion per year.

Antonia Mercorella, CEO of the Real Estate Institute of Queensland (REIQ), said, “Over the past five years, Queensland has recorded the highest growth in property taxes of any state. Even with Victoria increasing taxes on property such as windfall gains tax in that period Queensland is still taking the cake for escalating tax take.”

She criticised the government’s lack of reinvestment in social housing, stating, “Despite record revenue and announcements relating to housing, it’s insulting and ironic that very little is being reinvested back into building social housing – with only 56 completed last year, the lowest on record and the lowest of any state.”

Ms Mercorella highlighted the broader impact of Queensland’s property taxes on home buyers, property investors, and the economy as a whole. She noted that over the last 12 months, Queensland had the lowest proportion of first home buyers of all mainland states for all purchases and owner-occupiers.

“Stamp duty is a financial hurdle that can add years to home buying timelines keeping people in the rental market for longer, and also deters empty nesters from downsizing creating utilisation inefficiencies in our existing housing stock,” Ms Mercorella said.

She added that ongoing and escalating land tax costs are inevitably partially passed on to renters to ensure investments remain sustainable.

The REIQ is calling for the indexation of land tax, with the threshold having remained at $600,000 since 2007, and for the stamp duty concessional threshold for first home buyers to be lifted to $800,000 to reflect modern-day prices.

“It’s clear our state’s antiquated property tax system is no longer fit for purpose, and this unhealthy addiction to new highs of property revenue must be tapered and kept in check,” Ms Mercorella said.

She concluded by highlighting the involvement of various levels of government in property transactions, stating, “At all points in property transactions, some level of government, whether it be state or federal, is also going along for the ride and reaping the benefits too – they all stick their fingers in the property pie, and concerningly that makes for a much less appealing meal.”