The Queensland government has scrapped a proposal to alter land tax arrangements for interstate property investors, in a move described as bowing to industry pressure and wealthy landlords.
The proposal – which met fierce resistance from the real estate sector and other states – would have seen interstate property holdings taken into account when determining whether an investor meets the threshold for land tax concessions.
Queensland’s premier, Annastacia Palaszczuk, decided to shelve the proposed tax on Thursday night, reportedly after speaking to interstate leaders who heavily opposed it.
The New South Wales premier, Dominic Perrottet, announced this week he would refuse to hand over information about Queensland property holders living in NSW, to prevent them from being added to Queensland’s land tax list.
Through a spokesperson Queensland’s treasurer, Cameron Dick, on Friday said he stood by his comments about the need for reform.
“The treasurer stands by everything he’s said about land tax, but of course he accepts the decision the premier has made after talking to other leaders,” the spokesperson said.
Greens MP for South Brisbane, Amy MacMahon, said shelving the land tax proposal was incredibly shortsighted.
“Decades of tax breaks for wealthy property investors put us in this housing affordability crisis in the first place by artificially inflating house prices, locking working families out of the market and pushing up rents,” MacMahon said.
“The government backed down on crucial rental reforms last year when the REIQ [Real Estate Institute of Queensland] threw a tantrum, and now we see them cowering before wealthy property investors yet again.
“The upcoming housing summit will be a sham if the state government just bows to the desires of wealthy property investors and the REIQ.”
John Quiggin, an economist at the University of Queensland, said it was extremely “unfortunate” that a reasonable proposal had been axed as a result.
“What we had was a loophole that only benefits large investors with holdings in multiple states that harms everybody else in Queensland who wants to buy land,” Quiggin said.
“It was striking, the voracity of the campaign over tax adjustment which only affects interstate investors.”
The REIQ and the state opposition celebrated the shelving of the proposal, which they dubbed a “renters’ tax” that would have led to rent hikes.
“The REIQ has led the charge against this land tax since December last year and we worked with various stakeholders to fight the changes,” chief executive of the REIQ, Antonia Mercorella, said.
“To send shockwaves through the private housing investment market during a rental crisis was unprecedented and illogical.”
But Guardian Australia has spoken with more than a dozen experts who say there is no evidence the proposal would have a detrimental effect on the housing market or result in rent increases.
The chief executive of Tenants Queensland, Penny Carr, said rents had been increasing for months, with a lack of supply driving up the cost.
“People are calling us all the time about increased rents. It’s not tied to the land tax issue,” Carr said. “We’ve had historically low vacancy rates and that’s driven rents up.”
The Queensland government will hold an affordable housing summit next month, amid concerns about homelessness and a severe lack of secure housing.
Karyn Walsh, the chief executive of not-for-profit organisation Micah Projects, said solutions need to be focused on getting people into housing, not catering to the vested interests of the real estate sector.
“Many people are falling into homelessness. People are living in cars or couch surfing,” she said. “We’re seeing lots of people lose the places they’ve been in for six or seven years.
“There’s no security in tenure, there’s no rent freezes. I can’t see how property owners are being disadvantaged at the moment to be honest.”
Walsh said long-term solutions were needed rather than the perpetual funding of crisis responses.
“We certainly need some crisis responses but it’s got to be balanced with what are we doing long term to create affordable housing for the lowest income people in our community,” she said.
Guardian Australia has contacted the Queensland premier for comment.
