The Real Estate Institute of Queensland (REIQ) is calling on the Queensland Government to rescind foreign investor surcharges, in light of the state’s housing crisis.
The REIQ has long-opposed both the seven per cent surcharge applied to stamp duty introduced in October 2016, and the additional two per cent surcharge applied to land tax introduced in 2019 on Queensland property held by foreign entities.
REIQ CEO Antonia Mercorella explained that both additional taxes on foreign investors – who are already being taxed at a Federal level – act as a deterrent for capital to be deployed in Queensland.
“When the Labor Government introduced additional surcharges for property transactions from foreign buyers, the REIQ called it out as a cash grab which would deter desperately-needed property investment and would slam the state shut for business,” she said.
“A growing population is a great thing for our economy, but in order to welcome more people and reap these benefits, we also need to be welcoming investment in housing – particularly when it helps get new residential supply off the ground.”
Ms Mercorella said that given the current housing crisis it was time for these taxes to be fully phased out.
“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,” Ms Mercorella said.
“Queensland Revenue can offer ex gratia relief where projects enhance the community or the economy,” she explained.
“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.
“We saw that with Build to Rent projects the Government was prepared to offer this relief to large foreign multi nationals investing in that asset class.
“This leads to the danger of a skew towards this asset class when diversity is required to meet the ever-changing demands of Queensland’s growing population.
“Therefore, the REIQ’s view is that it would be appropriate to extend this exemption to all foreign investors, not just foreign pension funds and developers.”
She said that a recent ruling in New South Wales found foreign investment surcharges to be in breach of 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,” Ms Mercorella said.
This article was contributed by REIQ.
You can find more information at: https://www.reiq.com/
Original article source: https://www.reiq.com/articles/time-to-wind-back-foreign-investor-surcharge-says-reiq/