Stamp duty threshold hiked: Is Queensland the new top choice for first home buyers?

More Queenslanders will see stamp duty waived on the purchase of their first home, with those spending up to $700,000 now exempt from paying the tax.

First home buyers were previously limited to spending less than $500,000 if they wished to avoid paying stamp duty on their purchase.

Queensland premier Steven Miles announced the change - a key piece of the upcoming state budget - on Sunday.

"By increasing the eligibility threshold, we are giving aspiring homeowners a fairer go," the Queensland Labor leader said.

"This is a real cost of living measure, that will also help deliver inter-generational prosperity."

How much could first home buyers save?
Property value	New stamp duty exemption threshold	Old stamp duty exemption threshold
$500,000	$0	$0
$549,999	$0	$9,750
$600,000	$0	$12,850
$650,000	$0	$15,100
$700,000	$0	$17,350

All values calculated using Your Mortgage's stamp duty calculator

Under the new system, first home buyers purchasing a property for less than $700,000 won't pay any stamp duty, while those paying up to $800,000 will receive a stamp duty discount.

Those who build their first home will also see stamp duty waived if they purchase vacant land for less than $350,000, with land purchases of up to $500,000 also eligible for a discount.

The change will help to reduce the cost of entering the property market for around 10,000 more first home buyers each year, according to the Queensland Government.

See also: Stamp duty calculator

The previous threshold made the stamp duty waiver "virtually redundant" following notable growth in property values in recent years, REIQ CEO Antonia Mercorella said.

"With Queensland having the lowest rates of home ownership of any state and declining first home buyer activity, a stamp duty overhaul is critically important," she said.

However, she believes the cap of $700,000 is still too low, particularly for areas such as Brisbane, where the median dwelling price has surpassed $843,000, according to CoreLogic figures.

Queensland opposition leader David Crisafulli had promised to increase the first home buyer stamp duty threshold if the Liberal National Party were to win power in the October state election.

Any rise in demand for property resulting from the new thresholds is expected to be offset by an increase in the foreign investor land tax surcharge.

It will be lifted to 3%, with the transfer duty surcharge for foreign buyers also being boosted to 8%.

The Queensland Government is following in the footsteps of its South Australian counterpart, which abolished the threshold for its stamp duty exemption for those building their first home last week.

The move comes just months after the Sunshine State's first home owner grant was doubled for first home buyer-builders, with eligible recipients now able to receive as much as $30,000.

Brisbane: The most affordable Australian capital for first home buyers

News of relaxed stamp duty concession thresholds comes just days after PRD crowned Brisbane as the nation's most welcoming capital city for first home buyers.

PRD's latest Affordable & Liveable Property Guide found that nearly a third of properties sold in Brisbane over 2023-24 were priced under $650,000.

"We all know that Brisbane is getting expensive but the good news is, compared to other capital cities ... Brisbane has the highest percentage of affordable suburbs," PRD chief economist Diaswati Mardiasmo told Your Mortgage.

More than 25% of the city's suburbs boasted affordable house prices, while over 40% of its suburbs offered affordable unit prices.

"Even better, compared to other capital cities, these affordable suburbs can be found all over Brisbane," Dr Mardiasmo continues.

Affordable suburbs for houses include Strathpine, Griffin, Alexandra Hills, Daisy Hill, and Runcorn, while some affordable suburbs for units are Richlands, Mitchelton, Springwood, Capalaba, and Thorneside.

However, the newly increased stamp duty exemption threshold, as well as the recently-doubled first home owner grant, could increase demand in the city, and thereby prices.

"On a short term basis, it will make Brisbane, and Queensland in general, more affordable," Dr Mardiasmo said, noting the new stamp duty concession threshold is lower than the median house price of many regional areas such as the Fraser Coast, Toowoomba, and Ipswich.

"It’s a catch 22. History tells us that grants and schemes do increase demand and, therefore, the median price [in the long run]."

She added that such demand could be exacerbated by the housing crisis or limited by the higher interest rate environment and the cost of living crisis. Market fanatics will simply have to "wait and see".

Foreign investor tax hike slammed by industry

The increase to the land tax surcharge and transfer duty surcharge for foreign buyers has attracted the ire of the Property Council of Australia's Queensland division.

The Property Council's Queensland executive director Jess Caire labelled the 'apartment killer' tax hike "nothing short of a race to the bottom".

The industry body said the increase will limit the number of apartments being built in Queensland, limiting supply for first home buyers and renters.

"It's giving with one hand and taking away with the other - this will see first home buyers and renters alike facing a more competitive and more expensive market," Ms Caire said.

"Queensland, unlike New South Wales, taxes companies that have a portion of foreign ownership - the very companies that build the new homes and apartments that the first home owners who received this concession today will buy."

The Queensland Government argues that the state's land tax foreign investor surcharge remains lower than that of NSW, while the hike brings the transfer duty surcharge charged to foreign buyers in line with that of NSW and Victoria.

"Foreign investors have had a great run in Queensland, but they compete with Queensland families for real estate," Queensland deputy premier and treasurer Cameron Dick said.

"It's only fair that they contribute to helping more young Queenslanders into their first home."

_{Image by Michael Marais on Unsplash}