Queensland urged to abolish stamp duty amid record-breaking price growth

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on December 15, 2020
Queensland urged to abolish stamp duty amid record-breaking price growth

There have been renewed calls for Queensland to follow the lead of southern states and dump stamp duty.

The Real Estate Institute of Queensland (REIQ) found median house prices in much of the Sunshine State had risen for the second consecutive quarter. 

Amid the explosive price growth, REIQ CEO Antonia Mercorella said stamp duty was one of the biggest barriers to homeownership and needed to be scrapped. 

“Clearly the abolition of stamp duty – universally acknowledged as the most harmful tax within Australia – must be front and centre of any meaningful tax reform effort at this moment when it’s most needed," Ms Mercorella said.

"That’s why it really is a missed opportunity to do something really impactful for the Queensland economy in which we would have a more stable tax base in the future, while helping with housing affordability.”

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New South Wales announced in their budget in November they would be launching a proposal to give home-buyers the option to axe stamp duty in favour of a land tax. 

Queensland Treasurer Cameron Dick gave no mention of stamp duty when announcing his budget, instead focusing on infrastructure spending, a build-to-rent program in the CBD, and investment in health and education. 

According to the REIQ, stamp duty abolishment could see a 60% increase in property transactions, with every $1 million spent on residential construction creating nine jobs in Queensland. 

The REIQ proposed first introducing stamp duty exemptions for Queenslanders aged over 65 and all business sales, and then replacing stamp duty with a broad-based land tax, seen in the Australian Capital Territory. 

"As a direct disincentive to purchasing property; stamp duty reduces labour mobility, increases business restructuring costs, prevents efficient upsizing or downsizing, and makes the economy less efficient," Ms Mercorella said.

"These factors are to the detriment of businesses and workers that rely on the turnover of stock in the property sector." 

Queensland debt is set to hit $130 billion within four years, and a recent report from Deloitte Access Economics said the soaring debt needed to be used for good, and meaningful tax reform was needed. 

“As recovery decisions are made globally, the gap between the state’s debt and revenues will increase over time if Queensland doesn’t deliver a bold and competitive economic agenda on the right scale,” the report said.

Queensland Minister for Housing Leanne Enoch was contacted for comment. 

[Comment: Why a property tax is not the answer

Record-breaking house price growth 

Ms Mercorella said Brisbane house prices were now exceeding pre-pandemic levels. 

"And with property prices forecast to perform strongly in the year ahead, it’s fantastic to see Brisbane reach a record-breaking $720,000 median price in these latest quarterly results on the back of 4.4% annual growth,” she said.

“While Brisbane remains considerably more affordable than other States, Corelogic forecasts that one in ten houses sold in our capital will fetch more than $1 million within the next 2 years, offering some of the best prospects of long term capital growth." 

The REIQ found regional Queensland was leading the price charge: Isaac, nestled between Mackay and Rockhampton rose by 28.5% in the September quarter, and the Shire of Murweh in the Maranoa district saw a 21.2% increase. 

Noosa continued to be the strongest performer for median house prices for the third consecutive quarter, with a rise of 3.6% to $895,000. 

“Noosa has clearly seen the biggest market gains when you consider its ushered in a median house price of $895,000 on the back of an incredible five-year’s growth of 53.6%, easily maintaining its position as the most expensive housing market in Queensland,” Ms Mercorella said. 


Photo by Jordan on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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