Reforms to Queensland’s foreign investor tax settings are being welcomed by the building industry, with the changes expected to boost new home construction and help ease the state’s housing shortage.
The Housing Industry Association (HIA) said changes to the State’s foreign surcharge relief framework would reduce red tape, improve investor certainty and restore Queensland’s competitiveness as a destination for housing investment.
HIA Chief Economist Tim Reardon said the reforms would lead to more homes commencing construction, while also generating additional revenue for both State and Federal Governments.
“Reforms to Queensland’s restrictions on new home building will see more new homes commencing construction, adding revenue to the state and Australian governments, and assisting the task of increasing housing stock,” Mr Reardon said.
He said Queensland needed more foreign investment in new housing construction, not less, particularly at a time of acute supply shortages and rising rents.
“By streamlining relief arrangements and expanding access criteria for foreign investor surcharge exemptions, the Government is sending a clear message that Queensland is once again opening up for investment that leads to housing delivery,” he said.
Mr Reardon emphasised that foreign investors do not compete with Australians for existing homes, noting that overseas buyers have been prohibited from purchasing established dwellings since 1975.
The recent reforms apply only to the construction of new housing.
“Queensland has seen the volume of new apartment commencements collapse as foreign investors shifted to building new homes in other countries without these punitive taxes,” he said.
“This has been the worst own-goal housing policy.”
He said overseas-owned building companies were responsible for around one in 10 new detached homes constructed in Australia, and penalising these firms in Queensland had worsened housing shortages and increased pressure on public housing.
“Like other jurisdictions, Queensland faces shortages of homes and rising rents,” Mr Reardon said.
“Removing unnecessary barriers that discourage investment in new housing is essential if supply is to respond to demand.”
While welcoming the reforms, Mr Reardon said further work was still needed to address the broader tax framework impacting housing investment.
“These changes add clarity around this tax impost and will help underpin project viability, but this is not a substitute for fundamental reform to this punitive set of taxes,” he said.
“This is not about favouring one type of investor over another. It is about ensuring that projects which deliver homes for Queenslanders are not held back by unnecessary regulatory barriers.”
Mr Reardon said reducing the effective cost of investing in new housing would bring Queensland into closer alignment with other jurisdictions.
Housing Industry Association
