The Queensland Government will scrap the implementation of the controversial land tax plan.
The Real Estate Institute of Queensland (REIQ) confirmed with Savings Media Group the government's change of heart.
REIQ CEO Antonia Mercorella said the land tax could have damaged property investor confidence at a time of the tightest vacancy rates in history.
“Abandoning the contentious land tax regime will bring confidence back to the property investor market in a time of great uncertainty,” she said.
“The land tax changes would have also potentially impacted commercial property investment and national employers with Queensland domiciled premises."
“We appreciate the government’s move to shelve this retrograde tax reform and look forward to working with them at the Housing Summit in October to address the state’s housing supply issues.”
The Property Council executive director for Queensland Jen Williams commended the move by the state government, saying it was the right decision given its likely impact on the rental market.
"As details emerged of how the new tax would be implemented, it became clearer just how untenable it would be,” she said.
“The complexity of the tax and its reliance on the self-disclosure of individuals and data-sharing of other states reinforces this plan should be completely scrapped, and not just put on the shelf until a future day."
Ms Williams said this move would bode well with the opportunities that the Brisbane 2032 Olympics provide to the state's housing market.
"Over the past few weeks, we have seen the Queensland Government take swift and decisive action to address the state’s housing crisis, with the shelving of this tax now added to the list," she said.
"Walking back from this tax sends an important signal that Government is listening and is willing to take on board the feedback of industry.”
The new land tax rules, if implemented, will see the state include taxable land in relevant interstate land when calculating the tax for Queensland. This means that if those with multiple properties outside Queensland will bear higher tax in the state.
Property groups and even other state governments heavily criticised the plan, with the New South Wales Government calling the plan a “lazy policy.”
NSW Premier Dominic Perrottet said in recent reports that NSW would “refuse to share crucial data require” to implement the policy.
“We will reject any request from Queensland Labor to help facilitate this lazy policy,” Perrottet said.
“Labor don’t support first homebuyers in NSW and now the Queensland Labor government is reaching across the border to tax NSW properties and hard-working residents.”
Meanwhile, Property Investment Professionals of Australia (PIPA) Chairperson Nicola McDougall said more investors are likely to sell should the new land tax come into effect, which would only worsen the rental crisis.
“We had an inkling that investors had been selling their holdings over the past year or two, but these results show that even we had under-estimated the volume of rental properties that have been jettisoned from the market,” she said.
“The fact that 45.1% of investors sold at least one property in Queensland is mind-blowing – especially since this was mostly a period when the ridiculous new land tax wasn’t even law.”