Call for Queensland tax overhaul: '30 per cent of apartment cost is taxes'

A holistic review of the tax system is the key to bringing new homes to market, with housing affordability the most pressing issue the Property Council Queensland is trying to address.

In an exclusive and wide-ranging interview with API Magazine, Jess Caire, who in February was appointed Property Council Queensland Executive Director, said the property and building sectors nationally were at a critical juncture, with Queensland not alone but facing “additional circumstances that are exacerbating the issues.”

Without wholesale changes to the tax system that is responsible for a third of the cost of an apartment in Queensland, and the release of new land, the state would struggle to house its ever-growing population.

The Property Council Queensland recently issued a report, Stacked against us, which shows that more than 33 per cent of a purchase price of a new apartment in Brisbane is made up of Government taxes, fees and charges.

“Challenges stem from increased migration to Queensland, a huge government big build and, of course, the 2032 Olympic and Paralympic Games that are on the horizon,” Mr Caire said.

“The costs to deliver new homes and apartments are a huge barrier here in Queensland, with project feasibility just not stacking up – despite the unrelenting demand.

“The private sector, however, is competing for trades, who are increasingly being lured to the large government projects, so this is making things harder.

“In order to boost supply, we need to look at the whole ecosystem, and unfortunately, little action has been taken to address the cost barriers.

“We have been calling for a review of tax settings that add a huge cost to the development of projects, the taxes and charges levied at the front end of a development are a huge impost – and ultimately that gets passed on to the buyer.”

Ms Caire said that without a major government overhaul of this “outdated” tax system, the state would struggle.

“The most impactful thing the government can do that will make bringing new homes to market more affordable is a holistic review of our tax system.

“This would include levelling the playing field for build-to-rent, so Queensland is at least competitive with NSW, and reviewing Queensland’s outdated land tax and transfer duty thresholds to adjust for rising property prices so we can ensure mum and dad investors retain their properties, which make up a large volume of the rental pool.”

From South Australia to unlikely voice for Queensland

Jess Caire is perhaps an unlikely advocate for Queenslanders, and may not have become such a vocal representative of the state had it not been for a potentially ruinous event.

“I relocated to Queensland for family reasons in a fly-in fly-out (FIFO) capacity back in 2016, and I would do a week in South Australia, when I still had my own businesses, and a week in Queensland.

“That got exhausting pretty quickly, and later in 2016 I was involved in a pretty horrific accident, that was very nearly life-ending for me, but became a life changing opportunity for which I am forever grateful.”

She then set about setting up the business to be sold, got serious about finishing her degree, and a year later, had sold up and relocated to Queensland permanently, enjoying a semi-retired lifestyle.

“During my time as a conveyancer in South Australia I had built some solid relationships across the industry and one was with PEXA, who approached me to take an executive position in Queensland.

“It was pretty daunting given I had done things in reverse to most, so I took my first corporate role in my mid 30s!

“It was great, and through that experience I built relationships with a variety of industry stakeholders and the Property Council was one of them.”

A unique career timeline

The nascent roots of a career in the property sector were planted when observing her hard working father, who had grown up in a housing trust home but achieved financial security through buying, renovating and selling property.

The rite of passage from regional South Australia to London at just 18 beckoned first, followed by a relocation to Melbourne, subsequent work in law firms, and then conveyancing.

“Conveyancing was something that just made sense to me, and it played to my personality strengths – organised, people-centric and with a tangible result, and from there my passion grew.

“I formalised my qualifications in South Australia, the home of our Torrens Title System, and when I returned to South Australia I worked for a law firm, then a conveyancing practice that covered all of the weird and wonderful things that property transactions have to offer – rural transactions, water licences, crown leasing, easements, subdivisions; I just loved it and wanted to learn it all.

“At that point, I was pretty young and clearly had misplaced confidence – I told my boss I wanted to buy his firm, and I did – so for the next decade I ran that firm and bought and sold others along the way, which is where I realised I loved business and wanted to learn more – so as a mature age student, with two babies and two businesses, I started my Bachelor of Business.”

Infill not the silver bullet

Fast forward to today and those life, career and educational skills are being directed at helping to resolve Queensland’s housing crisis.

Brisbane is now the second most expensive capital city in the country when it comes to housing, recently overtaking Canberra’s average.

The median dwelling price in Brisbane is now $859,240. The national median dwelling price is now at $793,883, according to data released by CoreLogic on Monday (1 July).

The recent state budget set aside $2.8 million to build new homes and other housing options, such as domestic violence shelters.

The plan promises to create up to 600 new modular homes that will be built in factories to speed up the rollout. There is also a target to build 53,500 new social homes by 2046, including youth foyers, domestic and family violence shelters and emergency housing.

Ms Caire said that since the landmark October 2022 housing summit, there have been several welcome initiatives, including planning reform, and innovative ways to incentivise infrastructure delivery through grants or low-rate loans.

She added, however, that taxation settings have not been reviewed despite the impact they have not only on homeownership, but also on the institutional investment required to deliver the extraordinary number of homes required to meet the unparalleled demand.

“Disappointingly, the recently released 2024-25 Queensland Budget has seen the government raise taxes further on the very companies delivering much needed homes – only to drive up costs and drive out development.

“This will particularly hurt renters, as these types of developers – these companies, well known household names, deliver a vast majority of our apartment stock.

“We need a coordinated infrastructure delivery plan that unlocks new land faster so we can get some detached homes built.

“There is a lot of focus on delivering infill housing typology, but we have to fast track catalytic infrastructure to unlock new land.

“But as it stands our housing market is struggling to keep up with the influx and this is due to years of underinvestment in housing and infrastructure to unlock new land.”

Queensland Treasurer Cameron Dick announced Monday night (1 July) that a review of state property taxes and charges will be conducted after the 26 October election.