The Queensland Government has reversed its policy on attracting foreign investment in the local housing market, announcing a new 3 per cent surcharge on stamp duty for foreign buyers.
Queensland Executive Director of the Property Council, Chris Mountford, has labelled the announcement a broken promise and a high risk move for Queensland’s fragile economy.
“The Treasurer has previously committed to making Queensland the most attractive state for foreign investment, now he is looking to abandon this competitive advantage in the search for more revenue.”
On May 6 2015, Treasurer Curtis Pitt ruled out any new State taxes targeting foreign property investors in Queensland:
“In the lead up to the election we made it very clear that we wanted to provide certainty to businesses and investors, and that we would not be changing the existing revenue policy settings this term of government,” Mr Pitt said.
“Therefore, we’re ruling out any stamp duty surcharges for foreign investors who purchase a house in Queensland."
“We want to send out a very clear message that Queensland is open for business and that we welcome foreign property investment,”
Queensland Treasurer Curtis Pitt[/caption]Mr Mountford said that the policy reversal will be a significant shock for industry confidence and will place many projects at risk.
“At a time when the Queensland Government’s resource revenue is being drastically written-down, trying to recoup losses from one of the few sectors of the Queensland economy that is currently generating jobs is short-sighted,” Mr Mountford said.
“Our residential development cycle has reached its peak. The Treasurer’s actions are likely to intensify the market’s cooling process, impacting construction work and ultimately jobs over the next 12 months and beyond. Foreign investors enable new residential projects to get off the ground, creating a huge economic benefit for the state and producing new stock that puts downward pressure on rents and keeps housing affordable for Queensland families,”
“The Treasurer’s commitment to increase the first home buyer incentives is welcome, but they will not be enough to offset the significant impact of this policy reversal. There are international investors currently weighing up the merits of residential projects in Queensland. If they choose to go elsewhere so will the Government’s revenue.” Mr Mountford said.
Treasurer Pitt additionally announced a new First Home Owner Grant will form part of next week's budget, with the aim of pushing Queensland housing affordability, according to BrisbaneTimes.com.au.
Speaking at a Queensland Media Club luncheon, Mr Pitt said the First Home Owner scheme would be boosted from $15,000 to $20,000 for buyers of their first newly constructed property under $750,000, to be lifted in Tuesday's State Budget.
The grant is currently $15,000 for buyers of newly constructed homes.
“We will lift the current $15,000 grant for buyers of newly constructed homes to $20,000,” Mr Pitt said.
“The grant will be able to be used to buy a newly constructed house, apartment or townhouse valued less than $750,000.
“This is a great time to build in Queensland with affordable housing on offer and the Palaszczuk Government’s first homeowners grant will make it even easier to enter the property market," The Courier Mail reported.
Mt Pitt also announced a new stamp duty surcharge of three per cent on foreign buyers after ruling it out last year when Victoria introduced a similar measure.
“This will ensure foreign purchasers of residential property who benefit from government services and infrastructure make a contribution to their delivery as local buyers do,” he said.