Experts are calling for the Queensland government to wind back foreign investor surcharge.
The additional taxes for foreign investors in Queensland seem to be having a lasting impact on its housing supply.
According to Housing Industry Association (HIA), the volume of new apartments commencing construction has fallen 47% since the introduction of the surcharge in 2016.
HIA executive director for Queensland Mike Roberts said the increased taxes for foreign investors are hampering the state’s ability to increase the supply of housing to meet the record level of migration.
“In addition to paying more than double the amount of stamp duty in Queensland compared to domestic investors, they have also seen an increase in costs from the Australian Government in recent years,” he said.
“The acute housing shortage in Queensland will continue to deteriorate if investment in new housing continues to attract more taxes and charges.”
For Mr Roberts, foreign investors are not competing with first home buyers or forcing up house prices.
“It is quite the opposite — foreign investors can only buy new homes, not established homes. They cannot take the apartments overseas with them, and therefore are increasing the stock of housing,” he said.
“For this reason, they have a critical role in increasing the supply of new housing, especially apartments in SEQ Region.”
Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said the taxes imposed on investors in the state on top of the charges at the federal level act as a deterrent for investment to be deployed in Queensland.
“With about 36% of people in Queensland living in rental accommodation, the supply of rental properties is crucial, and therefore we need investors – both local and foreign – to make important contributions to the stability of the rental market,” she said.
Ms Mercorella pointed out that if the state can offer relief to large multi-nationals in the build-to-rent space, why not extend this exemption to all foreign investors, not just foreign pension funds and developers.
“Queensland Revenue can offer ex gratia relief where projects enhance the community or the economy,” she said.
“Given the ongoing housing crisis, surely any projects that provide a roof over the head of Queenslanders and increase much-needed housing stock would meet this criterion.”
Meanwhile, she pointed out how the foreign surcharges are actually against existing agreements, citing the recent ruling in New South Wales that found foreign investment charges to be in breach of the Commonwealth Double Taxation agreements.
“This ruling also gives weight to the argument that the Queensland Government needs to fully rescind these additional taxes to ensure Queensland aligns with Commonwealth laws and agreements,” she said.
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