Taxpayers would need to pay $1 billion each year to give landlords the tax breaks they desire, Queensland government modelling shows.
The Treasury analysis comes in response to lobbying from the Property Owners Association of Queensland and the Real Estate Institute of Queensland (REIQ) to reduce land tax on landlords.
The Property Owners Association wants the state government to raise the tax-free threshold on land values by 200 per cent, from $600,000 to $1.8 million.
Treasury modelling shows the proposal would cost the budget $1 billion a year over the next four years.
The REIQ wants land tax thresholds indexed to keep up with inflation since the threshold has not changed since 2008.
A Treasury spokesperson said the proposal would cost taxpayers hundreds of millions of dollars each year, rising to $400 million in the 2027/28 financial year alone.
"Land tax is a critically important part of Queensland's revenue base," the spokesperson said.
"It pays for things like new roads, hospitals and schools, and it pays the wages of nurses, teachers and police officers.
"Even so, Queensland has one of the most generous land tax thresholds in the country."
Treasury analysis shows 0.9 per cent of Queensland's population pays land tax, disproportionately affecting people who own multiple investment properties.
Land tax does not apply to homeowners who live in their house as their principal place of residence.
Property Owners Association vice-president Alexandra Dapontes said the government was responsible for pushing up the cost of rents through their land taxes.
"They obviously don't care about homeless people because they are obviously more worried about their money and figures," Ms Dapontes said.
"I think they should focus on building a lot more social housing for people because people are waiting up to five years to get a social house from the government."
The Property Owners Association will be petitioning the state government to raise the land tax exemption threshold until September.
REIQ chief executive Antonia Mercorella said it was time to reform property tax laws, given the steep rise in property values.
She cited Australian Bureau of Statistics data which shows property taxes have risen by 133 per cent over the past 10 years off the back of soaring house prices.
"It's clear our state's antiquated property tax system is no longer fit for purpose, and this unhealthy addiction to new highs of property revenue must be tapered and kept in check," Ms Mercorella said.
"At all points in property transactions, some level of government, whether it be state or federal, is also going along for the ride and reaping the benefits too – they all stick their fingers in the property pie, and concerningly that makes for a much less appealing meal."
Get local news, stories, community events, recipes and more each fortnight.