The Queensland government has earmarked property investors as one of its key targets to squeeze for income as part of its efforts to salvage the state’s fiscal woes, says the state’s real estate institute.
According to the Real Estate Institute of Queensland (REIQ), the state government’s financial audit has outlined potential revenue-raising measures including the following:
- imposing a $100 levy on all property owners;
- reducing or removing the concession on land tax;
- applying a premium transfer duty rate;
- and increasing the landholder acquisition duty rate.
In a worrying commentary on the government’s plans, the REIQ has stated that any further financial imposts on property investors is likely to see them pull up stumps and sell their rental properties.
In short, property owners are sick and tired of having to bail out the government, said acting REIQ CEO Antonia Mercorella.
“Property owners – and investors specifically – seem to forever be targeted by all levels of government when they are short of cash, whether it is through higher council rates, one-off levies or higher rates of stamp duty,” she said.
“The additional legislative and compliance obligations on property investors over recent years, coupled with weaker returns on investment, has resulted in many opting to sell their rental properties.”
According to the REIQ, Australian Bureau of Statistics (ABS) data shows the number of investors active in the Queensland property market has halved in the last five years, and Mercorella believes this number is likely to decline even further if investors are slugged with additional costs as planned.
“We are currently starting to see the impact of this reduced investor activity with vacancy rates tightening and rents increasing across the state. If more investors left the rental market, then this situation would undoubtedly worsen,” she said.
“If land tax thresholds are reduced or removed, the added costs would put an end to the glimmers of renewed investor activity we have seen in recent months and would also likely be passed onto tenants via increased rents.
“Also the unit and townhouse market in particular is yet to see investors return significantly with the additional costs associated with this type of housing deterring investors.”