In a new landmark survey, industry leaders and investors have raised significant concern about the burden of real estate tax increases being imposed by state governments and local councils.
A third of all members of the Property Council of Australia (32%) put taxes and charges at the top of their concerns in the sixth annual Procure/Property Council survey.
It found more than double the number of respondents who want national tax reform to boost the real estate sector compared with results last year.
Some 22% of respondents raised this as an issue, compared with 10% in 2024.
Overall, taxation worries tracked at their highest level since the survey began in 2019.
Many respondents observed that state and local governments were focusing on boosting revenues rather than practising fiscal restraint.
Most complaints came from Victoria, where investors have been hit hardest by a range of new levies and compliance rules.
However, most respondents remained confident about the future of Australian real estate. The survey’s confidence index registered 124. The neutral benchmark is 100.
Planning assessment processes came in for heavy criticism from 21% of respondents.
Additionally, 32% said housing supply and affordability remained a critical issue.
Property Council chief executive Mike Zorbas said that “the way we tax new homes across the country has to change”.
“New home buyers are being slugged with a shocking tax burden. (Some) 30% of a new home’s purchase price goes in government taxes, only a fraction of which end up as community infrastructure,” he said.
“Add the extra taxes on institutional investment in apartments, build-to-rent, student accommodation and retirement living, and it almost looks like state governments don’t want new homes to be built. That means less investment in homes, commercial, retail and industrial assets that make people’s lives better.”
Expectations around residential house price growth remained high among survey respondents.
Mr Zorbas gave qualified praise for the Federal Government’s National Housing Accord, saying it had boosted construction efforts but the “reality is that we are behind our targets and without more effort, we won’t bridge that gap”.