Property industry cries foul on new taxes Labor says won't affect '99% of Qlders'


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Labor's Thursday announcement that it would implement two new taxes on the big-end of Queensland's property market has incensed the state's industry bodies to varying degrees.

Labor's announcement that it would implement two new taxes on the top end of Queensland's property market has incensed the state's property industry.

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Treasurer Curtis Pitt on Thursday said the new taxes would not affect "the average Queensland family".

The Property Council came out swinging, labelling plans to increase transfer taxes on foreign buyers to 7 per cent, and add a new land tax category on $10 million-plus properties, as discrimination. It suggested Labor was using peak-market valuations to cash in on the 2.25 to 2.5 per cent land tax.

The two taxes would net the state government $33 million and $227 million, respectively.

"With a big new tax to be imposed on properties above $10 million, it is now clear why the government is keen to lock in valuations issued at the peak of the market," Queensland executive director Chris Mountford said.

"These inflated valuations, coupled with a 2.5 per cent land tax surcharge, will deliver the government far more than its fair share of taxes from the industry."

But others have refused to wade in the new tax category or the Property Council's comments.

The REIQ declined to say whether it opposed the new tax and CBRE's research arm expressed doubt it would have much impact on the state's burgeoning economy.

Stephen McNabb, CBRE's Australian head of research, said Queensland in the past few years had developed positive economic markers; in particular, relative affordability leading to strong interstate migration from the southern states.

"A lot more people are moving back to Queensland because there's more opportunities in the state," Mr McNabb said. "The indicators are pointing in that direction. You're getting a reasonable amount of investment activity in Brisbane at least."

Construction jobs from major projects like the Queen's Wharf casino and Cross River Rail would tide the economy over until completion, at which point further jobs would be added to the economy, he said.

As the economy improved, so would the property market, Mr McNabb said.

The REIQ criticised the government's increase on stamp duty for foreign investors. Chief executive Antonia Mercorella said it would scare off foreign investors.

"Slugging investors an additional 7 per cent will add potentially tens of thousands of dollars to the purchase price," she said.

"This surcharge hike is described as a strategy to raise revenue, but it will simply scare off foreign buyers, which will leave us with the same soft market and no additional revenue."

Ms Mercorella suggested those foreign buyers would take off to other states where stamp duty was lower. But Mr McNabb said Labor's new tax would bring Queensland's rate in line with other states.

"We've see those changes happen in other state in the past one to two years. We didn't see too much impact in those markets," he said.

"There are other factors at work now, we're seeing a slowing down on inflows of capital from China but that was mainly because of a restriction on outflow rather than any policy changes here."

The story Property industry cries foul on new taxes Labor says won't affect '99% of Qlders' first appeared on The Sydney Morning Herald.

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