Whoo! And just like that we’re in the New Financial Year and with it comes of course a new State Budget, as the LNP delivers their first budget in power in near on a decade.
This one has some wins for property in FNQ, with Cairns actually receiving the largest share in the state for both upgrades to existing social housing and for the construction of new social housing, with the bulk of the latter going into the current works at Woree on the old drive-in theatre site. Built from predominantly pre-fabricated modules, this will eventually deliver several hundred homes to the long vacant site, importantly close to the CBD, services and public transport.
First Home Buyers now have a blanket stamp duty exemption regardless of price, fighting off a very rapid price creep, and 1000 spots have been released for the QLD government’s shared equity scheme for property purchasers, though as anticipate the expressions of interest on those spots already outnumber places.
On the flip side of expenditure though, its amazing to see the sheer dollars the state government pulls in from the property industry, with land tax and stamp duty alone generating $9.3 BILLION in revenue for QLD. That’s incredible, and in fact makes up roughly 10% off the total state revenue base.
A lot has been made of the fact that stamp duty in particular, is an inefficient and unpredictable taxation system which prevents mobility in the market and leaves people in potentially the wrong properties for longer, further adding to affordability issues. It’s a big whack for someone in their later years to be ready to downsize but then need to spend an extra $20,000 (or more) as a clip of the ticket because they finally moved into a unit rather than staying in a 5 bedroom home they were rattling around in. its equally daunting for someone looking to upgrade for the first time (with 1st home buyers already exempt) and again, finding a lot of extra cash on top of their purchase price.
There have been proposals for alternative ways to replace that revenue, such as with an annual property tax (as has been introduced in NSW) but phasing out is almost guaranteed to never happen – that’s a lot of sugar to give away, and with the budget in the red for conceivably the next few years, its likely to stay on the menu for some time.