A new report by the Property Council of Australia has revealed that the Queensland government has collected an additional $3.5 billion (US$2.3 billion) in stamp duty over the last three years.
Stamp duty applies when you buy or transfer a property. According to the Executive Director of Property Council’s Queensland Division, Jess Caire, stamp duty makes up one-third of the price of a new home in Queensland.
“To put this figure into perspective, the seven new Satellite Hospitals in Tugun, Redlands, Eight Mile Plains, Bribie Island, Caboolture, Kallangur and Ripley currently being delivered by the government are budgeted to cost $377 million,” Ms. Caire said.
She said the government is cashing a massive unexpected revenue at a time when Queenslanders are struggling to earn enough money to live on and house their families.
The housing market has soared on the back of international and interstate migration, with Brisbane surpassing Melbourne in January to become the second most expensive capital city, according to median dwelling values.
Queensland Government Response
However, Housing Minister Meaghan Scanlon said buyers didn’t pay income tax on house purchases and Queensland had the lowest property taxes on the east coast.Ms. Scanlon said the additional revenue was spent on infrastructure including more affordable housing.
“We are spending way more than $3.5 billion on delivering infrastructure in the state schools, hospitals, homes and roads,” she told reporters on May 25.
Ms. Scanlon said the government was investing billions in home construction and incentives.
“The treasurer is absolutely focused on making sure we provide more relief to the households and we'll certainly look at ways that we can help families get into home ownership,” she said.
Request for Tax Reductions
Property Council Director, Ms. Caire said it has never been harder or more expensive to supply houses in Queensland, which is observable in the record low number of homes delivered across the state.The report found that home buyers in Brisbane would spend almost a decade paying housing taxes for a 30-year mortgage of $730,000 (US$480,000) on a house and land package.
The report suggested reviewing housing tax concessions and increasing the cut-off for first home-buyer concessions, which sits at $500,000 (US$300,000).
“It’s very clear that these taxes are in surplus and can be reduced to help bring an end to the housing crisis and restore affordability,” Ms. Caire said
“Recently we [Property Council of Australia] released research that showed the Brisbane apartment pipeline was set to dry up with no new projects expected after next year,” she said.
“While taxes are important to fund the services needed across Queensland, no property being delivered means no money is being raised to fund these services.”
Ms. Caire said a sensible balance that attracts investment in new homes and apartments while funding necessary services across Queensland is needed.
She said the Property Council of Australia calls on the government to work with them to achieve that balance.
Reinvestment of Extra Revenue
Ms. Caire also requested that the state government reinvest the additional revenue in property to supply the infrastructure required to support growth.She said that Queensland’s growth will undoubtedly raise property-related tax income.
“It’s important Queenslanders have visibility on how much is being raised and how it is being reinvested to support that growth,” Ms. Caire said.
“We are calling on the government to quarantine its extraordinary stamp duty and land tax windfalls into a transparent Queensland growth fund committed to delivering the projects, and attracting the investment, our growing state needs.”
