According to the Property Council of Australia, the 2018-19 Queensland Budget falls short on long-term economic management. In a media release on June 12, the PCA stated that
despite a royalties bonanza, dramatic tax rises, and optimistic economic outlook, expenditure levels will result in higher total State debt well into the future. While new infrastructure investment has been warmly welcomed, there are concerns about where the money is coming from to pay for it.
The Property Council of Australia called for reform, while at the same time the Queensland Treasury has cautioned that Brisbane’s weakening apartment market may take a turn for the worse if the Sydney and Melbourne markets begin to weaken.
Property taxes have upsurged in the last year to help top up state reserves and two new property taxes were introduced in this month’s budget, targeting foreign investors of assets in Queensland. Land tax thresholds have not been reviewed for a decade, and currently Queensland’s rates are far higher than both Victoria and New South Wales.
There are major concerns relating to the over-supply of around 15,000 apartments in Brisbane’s property market, and a recent report stating apartment prices have dropped more than 20% in recent years, however, in comparison to the apartment market, Brisbane’s house market is in much better shape.
These new taxes mean foreign landowners will be hit with an additional 0.5% in land tax for properties over $10 million. There will also be an upsurge in foreign transfer duties from 3% to 7%. Both taxes are expected to raise more than $326 million in the next four years.