One of Queensland’s leading homelessness advocates has accused the real estate lobby of hijacking efforts to address the state’s housing crisis, by using the issue to prosecute a campaign against land tax increases for interstate landlords.
The comments by Micah Projects chief executive, Karyn Walsh, come as multiple experts say there is “no basis” or evidence to support the real estate sector’s claims that rents would rise in Queensland due to the changes.
The Queensland government will hold an affordable housing summit next month, amid growing concern in the state about homelessness and a severe lack of secure housing.
At the same time, real estate agents, industry groups and some media outlets have begun to lobby against state government changes to land tax rules, which will affect only landlords who own multiple investment properties in different states.
The Real Estate Industry of Queensland and the state opposition – which has called the move a “renters tax” – are campaigning against the changes, arguing they would lead to landlords hiking rents, and ultimately exacerbate the rental crisis. The Courier Mail editorialised on Tuesday demanding the premier dump the policy.
Guardian Australia spoke to more than a dozen housing academics, economists, tenant groups and social service organisations this week: each said there is no evidence the changes would have a detrimental effect on the housing market, or cause rents to increase.
Rents were largely set by demand, not landlord costs, they said.
Walsh, who was named a “Queensland Great” last year, said the real estate lobby and others were “misusing the purpose of the housing summit” to lobby against the land tax rule changes.
“It’s not the intention of the summit (to discuss investor concerns about land tax) and it’s everyone’s responsibility to focus on the intention,” Walsh said.
“Poverty and inequality is a real concern to many Australians and we have to find solutions that are not just representing vested interests.
“We shouldn’t be diverting our focus to other issues.”
The chief executive of Tenants Queensland, Penny Carr, said rents had gone up consistently in recent years in line with low vacancy rates.
“We don’t think that as a general rule landlord costs set rents. We didn’t see rents fall when interest rates were down,” Carr said.
“There are some pretty big vested interests in some of the arguments around land tax. Sometimes governments have got to be brave and hold their nerve.”
Under the proposed land tax changes, interstate property holdings will be taken into account when determining whether an investor meets the threshold for land tax concessions. Some investors will have to pay marginally higher land tax rates on their Queensland properties as a result.
The Courier-Mail on Tuesday cited figures which showed an investor with a hypothetical $7m property portfolio – $4m in Queensland and $3m elsewhere – would pay an additional $5,714 a year in land tax under the rule changes.
John Quiggin, an economist at the University of Queensland, said the arguments being pushed by the real estate sector that rents would subsequently rise were “baseless in economics” and “captive of interstate interests”.
Managing director of the Australian Housing and Urban Research Institute, Michael Fotheringham, attended the government’s housing roundtable last week. He said property “remains an incredibly lucrative investment vehicle”.
“Tax settings in this country … are favourable to investors ahead of owner occupiers, including first homebuyers,” he said. “We’ve tinkered with first-homeowner grants to try to level the playing field, but the reality is that the playing field still favours investors.
“We’re not going to fix things by keeping things the same.”
Hal Pawson from the City Futures Research Centre at the University of NSW said claims that the tax changes would create problems in the rental market were “flaky”.
“This is really weaponising something that affects a very small percentage of the rental property in Queensland.
“Rents are set by the market. It’s a rather simple supply and demand question that sets rents. The claim that landlords will have to put their rent up, or will be able to, is a mistake.”
Antony Asher, from the University of NSW business school, said OECD figures showed that in Australia, 90% of the growth in value in property over the past 70 years had been an increase in land value.
“What a land tax does is bring the price down,” he said. “It’s good for housing. It’s a positive all round. And because you’re taxing investors, it’s not tough on the poor.”
Thinktanks the Australia Institute and the Grattan Institute have also made similar comments dismissing claims that the changes would affect the rental market.
In response to criticisms, the Real Estate Industry of Queensland CEO, Antonia Mercorella, said experts would always have “opposing views” about reforms.
“If all stakeholders at the housing summit want to get serious about raising solutions to address the rental crisis, you simply can’t have that conversation without acknowledging the critical role that private investors play in housing Queenslanders,” Mercorella said.
“We’re all working towards the same objective at the housing summit – to house our community, and to do that we need to recognise the economic realities of the situation and acknowledge that taxation and regulatory settings matter to investors.
“Taking an ‘us v them’ approach is not helpful and is becoming dangerous, because it’s the most vulnerable in our community who stand to lose the most.”
