Queensland real estate emerges as key contributor to state budget, surpassing mining

Queensland’s real estate sector has emerged as a significant powerhouse in the state’s financial framework, contributing more to the budget than the traditionally dominant mining industry. Recent analysis by the Real Estate Institute of Queensland (REIQ) has highlighted the sector’s growing importance, particularly in the wake of the latest state budget figures.

According to the Queensland Budget, property taxes are projected to average $11.3 billion annually, adding up to a hefty $45.2 billion over the next four years, from 2025-26 to 2028-29. This revenue will be sourced from $31.4 billion in stamp duty and $13.9 billion in land tax. These figures starkly contrast with the $30.2 billion expected from mining royalties over the same period, marking a $15 billion difference.

Antonia Mercorella, CEO of the REIQ, emphasised the pivotal role of real estate in the state’s economy. “Real estate is the backbone of the local economy, as one of the largest employers in Queensland of around 49,500 people and providing the state’s largest revenue source,” she stated. Her comments underscore a significant shift in Queensland’s revenue dynamics, with property taxes now eclipsing mining royalties as the primary source of income for the state.

The growth trajectory of property tax revenue is particularly striking, outpacing all other revenue streams except motor vehicle registration. The budget projects a 35.2% growth for property taxes, compared to a 14.5% increase in total government revenue over the next four years. By the 2028-29 fiscal year, stamp duty and land tax are expected to surpass royalties by a record margin of $5.8 billion.

Mercorella highlighted the implications of this shift, noting the state’s increasing reliance on property taxes to fund essential public services. “In 2025-26, the property tax takings could equate to 30,311 full-time equivalent (FTE) state public servants including nurses, teachers, police officers and more,” she explained. To break it down further, she added, “Property tax revenue represents the equivalent of 13,053 FTE public servants in Queensland Health, 8,541 employees in Education Queensland, 2,163 employees in the Queensland Police Service, and 6,554 in other agencies.”

This reliance on property taxes raises concerns about sustainability and the potential fiscal impact on property owners. The total value of residential real estate in Queensland was estimated at $2.15 trillion in March, according to the Australian Bureau of Statistics. This figure has nearly doubled over the past five years, reflecting a 96% increase from around $1.10 trillion in March 2020.

As property taxes increase their share of total taxation revenue from 33.2% in 2023-24 to 39.2% in 2028-29, and their share of total general government revenue from 8.4% to 12.3% over the same period, Mercorella called for a reevaluation of the tax system. “The substantial increase to property tax revenue is due to escalating property prices pushing properties into higher tax brackets – it’s a case of serious bracket creep,” she said.

While the state economy benefits from this revenue surge, there are concerns about its impact on property owners and the broader market. “It’s also important to recognise its fiscal impact on property owners and damping effect it can have on investment and market participation,” Mercorella noted. She advocated for addressing bracket creep and reforming stamp duty, which she described as a “regressive tax that adds significant upfront costs to property transactions.”

The REIQ suggests a phased approach to reforming stamp duty to avoid undue pressure on state finances. “Stamp duty is worth $31.4 billion over the Budget forwards, so we would welcome a phased-out approach to avoid placing additional pressure on the state’s finances,” Mercorella stated.

As Queensland’s real estate sector continues to play a crucial role in the state’s budget, the need for sustainable tax policies and reforms becomes increasingly pressing. The REIQ remains committed to advocating for conditions that support a robust and sustainable real estate industry, recognising its vital role in both the economy and the lives of Queenslanders.