Investors in Queensland are facing uncertainty as potential changes to the Residential Tenancies and Rooming Accommodation Act, as well as negative gearing, are still being deliberated.
The state government is set to complete its ongoing review of the Residential Tenancies and Rooming Accommodation Act in the first half of 2019, and some of the potential changes are concerning to landlords.
“The public rhetoric around this review seems to focus on eroding landlord rights and creating severe imbalance with disproportionate levels of power weighted in favour of tenants. The legislation must serve both parties equally, rather than give all the rights to one party and disadvantage the other. Distorted laws serve no one and will only create dysfunction in the rental sector,” Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said.
A possible consequence of the proposed changes would be a rental accommodation shortage. More than 34% of Queenslanders rent, and the number is still rising. Hence, losing investors because of the proposed changes could cause scarcity in supply.
REIV reported that investors are also concerned about Labor Party’s flagged changes to negative gearing.
Under the party’s proposed changes, negative gearing will be limited to newly built properties. The party also plans to halve the capital gains tax discount for properties that are held longer than a year from 50% to 25%.
Mercorella said that the negative gearing policy was first announced in 2015 when Sydney and Melbourne house prices were growing at double-digit rates. The original purpose was to control investor activity in the market and pave the way for owner-occupiers. This was expected to result in less competition for stock so as to eventually soften price growth. However, the situation is now different, with Sydney and Melbourne prices falling.
“This raises the question – does the nation really need a policy that is designed to push house prices down? What purpose do these changes serve now?” Mercorella said.