In the era of tight vacancy rates, the plan to calculate land tax rates based on investors' holdings across the country has been scrapped by the Queensland government. It was a highly controversial tax plan based on incorrect assumptions as to the "positive" effect it would have on lower-income earners.
REIQ CEO Antonia Mercorella said the tax plan could have damaged property investor confidence at a time of the tightest vacancy rates in history.
“Abandoning the contentious land tax regime will bring confidence back to the property investor market in a time of great uncertainty,” she said.
“The land tax changes would have also potentially impacted commercial property investment and national employers with Queensland domiciled premises."
“We appreciate the government’s move to shelve this retrograde tax reform and look forward to working with them at the Housing Summit in October to address the state’s housing supply issues.”
Property Council executive director for QLD, Jen Williams said it was the right decision given its likely impact on the tenants.
"As details emerged of how the new tax would be implemented, it became clearer just how untenable it would be,” she said.
“The complexity of the tax and its reliance on the self-disclosure of individuals and data-sharing of other states reinforces this plan should be completely scrapped, and not just put on the shelf until a future day."
During the initial threat of land tax being calculated across the investors' entire property holdings vs a state-to-state calculation, we saw a sharp decline in buyer interest in QLD and it pushed investors to other states.
We expect the investors to return with vengeance to the Queensland market as they would expect other investors to do the same.
This reversal to the norm and the potential, looming halting of another rate rise will see the Queensland market continue to surge upwards and of course, it will give more opportunity for tenants to choose from properties as more investors buy real estate and post properties for rent. Although the very real housing shortage continues and this will keep pressure on the rental market. Our opinion is that the local governments will be open to investment, granny flats and development.
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