Safe as houses: Government slashes land tax to ramp up rental investment
Land tax will be halved and the foreign land tax surcharge scrapped for investors committing to ‘Build-to-Rent’ developments, in a move that promises to deliver more affordable homes on a mass scale.
Premier Annastacia Palaszczuk.(AAP Image/Darren England)
The Palaszczuk Government says its range of investment-attracting tax concessions will deliver more rental supply, offering a 50 per cent discount on land tax payable for up to 20 years
The two per cent foreign investor land tax surcharge will also be waived over the same time period.
Both concessions will be applied from July 1 this year after the Queensland Treasury consults with the property industry to ensure delivery of more homes for Queenslanders can be supported.
After angering investors and property groups with recent comments that entertained the establishment of rent caps to make housing more affordable and to solve the state’s growing housing shortage, today’s announcement by Premier Annastacia Palaszczuk has been applauded by Property Council Queensland.
Executive director, Jen Williams said the announcement was exactly the support needed to help rapidly increase the supply of purpose built rental accommodation in Queensland.
“Unlike in countries like the United States where rental housing is typically owned by institutional investors, tenants in Australia are heavily reliant on ‘mum and dad’ landlords renting out their investment properties on the open market,” she said.
“This model has served the country well in the past, however with fewer rental properties available and ongoing demand pressures, there is a growing need for purpose built rental accommodation that can be delivered at scale.”
Williams said the tax breaks would clear the financial hurdles many investors faced with build-to-rent programs, tipping the announcement would spur a major influx of building activity.
“The Property Council has championed Build to Rent for the better part of the last decade and today’s announcement will encourage investors from around the world to look to Queensland to deliver well-located, fit for purpose rental housing,” Williams said.
Treasurer Cameron Dick said that while the private construction sector was at capacity across Australia, the Queensland Government would work with industry to “identify innovative ideas that create new pipelines of housing supply”.
“The build-to-rent projects that we’ve already brought to Queensland are already boosting rental supply,” he said.
Dick pointed to three developments in Newstead, Fortitude Valley and the Brisbane CBD that he said would deliver more than 1200 new dwellings, of which up to 490 rental homes would be provided at discounted rent due to government subsidies.
He said the Palaszczuk Government had also recently released a new invitation for expressions of interest under the $2 billion Housing Investment Fund on February 9.
“This process is targeting proposals with ready-to-proceed social and affordable housing developments on privately owned sites, including affordable-only proposals,” he said.
The Palaszczuk Government has also moved to limit rent increases to once a year, while providing a $28 million boost for emergency housing and $3.9 million for food and emergency relief.
Palaszczuk said there were more than a million Queenslanders renting their homes.
“And every single one of them must be given a fair go,” she said.
“A fair go to pay rent they can afford and not be penalised for the cost of living situation all Australians find themselves in today.
“The great majority of landlords do the right thing and look after their tenants – but for those who do not, this is a wake up call.
“We must act and will act to deliver reforms that balance the rights and interests of Queenslanders who rent and property owners to sustain healthy rental supply.”