The REIQ has slammed the Queensland government for failing to act on the eventual scrapping of stamp duty in the 2021-22 budget, a reform it said it had been advocating for.
The Queensland government released its 2021-22 budget recently, in which it announced various measures for housing and tackling homelessness, as well as measures for small businesses.
In the 2021-22 budget, the Queensland government announced that one of its “flagship initiatives” would be investment in housing and homelessness services, with $1.908 billion committed over four years to increase the supply of social housing, upgrade the existing stock of dwellings, and deliver critical housing services to “vulnerable” people.
The government said that to support this, it has established the $1-billion Housing Investment Fund, and added that its returns would be used to drive new supply to support current and future housing needs across the state.
For small businesses, the Queensland government announced the $140 million Big Plans for Small Business commitment, which includes the $100 million Business Investment Fund.
According to the budget papers, this would focus on assisting small business with innovating, growing and accessing new markets, including investing in skills and capability, and “by making it easier to do small business in Queensland”.
The government said that it is also providing support to Queensland’s live music industry with a new investment of $7 million in 2021-22 to support the sustainability of the state’s live music venues.
Furthermore, the Queensland government said that it would provide $140 million in additional funding over four years for a Back to Work program, to provide businesses with the confidence to employ those facing labour market disadvantage.
In response to the Queensland budget for 2021-22, the Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella welcomed increased social housing spending.
Ms Mercorella said: “We welcome what is believed to be the largest investment in social housing since World War II.
“The REIQ has been a strong advocate of more government investment in safe, secure and affordable housing, which is the foundation of building resilient and connected communities.
“The government has to do the heavy lifting in providing affordable housing for our most vulnerable. We welcome the large investment in putting roofs over people’s heads and the jobs that will be created during construction of this much-needed accommodation.”
She also welcomed budget measures for small businesses, including $30 million in grants and support for small business to increase their skills.
‘Thumbs down’ from REIQ on lack of stamp duty reform
However, Ms Mercorella said that she was disappointed that the government had failed to act on what she said were two key reforms that the REIQ had been advocating for, including the eventual abolition of the stamp duty, and changes to the First Home Owners’ Grant. She added that the real estate body has given a “thumbs down” to a lack of government progress on reforms in these areas.
The budget papers stated that transfer duty (stamp duty) is estimated to be 21.4 per cent higher in 2020-21 compared with 2019-20 due to the strong activity in the residential housing sector since mid-2020, with transactions across the investor, home and first home segments showing “significant growth”.
It said that transfer duty is expected to grow by 24.5 per cent in 2021-22, supported by continued strength in residential housing transactions, further growth in property prices, and a shift in the composition of transactions.
The Queensland government has estimated that stamp duty would generate almost $4.6 billion for 2021-22, and $3.7 billion for 2020-21, and has projected $4.1 billion in revenue for 2022-23.
The budget papers said: “The prevailing strength of the housing market has seen new housing loan commitments in Queensland rise to their highest level on record (since July 2002), with record-low mortgage rates (and expectations they will stay low for an extended period), various government wage and housing support measures, and temporarily reduced alternative options for household expenditure, including overseas travel.
“These factors, combined with expectations that property prices will continue to increase throughout 2021, have also supported investor loan approvals, which have driven recent growth in loan commitments. As a result, a compositional shift towards investor-driven purchases, which are subject to a higher rate of duty, is also expected to support the strength in residential collections.”
She said that the REIQ has advocated a 10-year phase-out of what an “economically inefficient and volatile tax”.
“With an estimated 340,000 property transactions foregone due to stamp duty each year, we believe its abolition would maximise housing access and choice for buyers,” she said.
“The abolition of stamp duty on business sales would help to remove financial barriers and encourage more sales.”
In addition, the Queensland government said in the budget that it has reaffirmed commitment to the $15,000 First Home Owners Grant program, and the $5,000 Regional Home Building Boost Grant.
Ms Mercorella said the First Home Owners Grant should be extended to beyond those who are buying or building a new home.
She concluded: “With the costs of new construction skyrocketing, giving first home buyers support to purchase existing housing (to the same current value of less than $750,000) will expose them to more affordable pricing options. The current grant significantly limits buying options and choice.”
[Related: Vic opposition vows to scrap stamp duty]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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