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Concerns over further surcharges for foreign buyers

Concerns over further surcharges for foreign buyers

 

Hot on the heels of the news that the Queensland Government is introducing a three per cent stamp duty for foreign buyers, Mike Baird’s New South Wales Government is under fire for its introduction of a four per cent stamp duty surcharge on foreign buyers as well as a 0.75 per cent land tax.

Responding to news of the NSW moves, Pitcher Partners Sydney’s Scott McGill warns the state risks inflicting damage on its property industry.

“The surcharges on foreign investors are a backwards step for NSW,” McGill says.

“Victoria has similar surcharges on absentee owners, and they’re already starting to see foreign investors pulling out of the market, with international developers scaling back on land acquisition.

“Combine that with a very tight lending market for developers and you run the real risk of restricting supply and pushing up real estate prices – which is the last thing Sydney needs.

“Government can’t afford to come in with a knee-jerk reaction to foreign investment without considering the downstream effects,” he adds.

“It’s far too simplistic to say foreign investors are making access and affordability harder for NSW residents.

“Higher taxes on foreign investors will not improve housing affordability, but rather it will undermine new supply coming on board.”

McGill also believes the Property Council was also right to say that NSW stands to lose its competitive advantage over Victoria when it comes to attracting foreign investment.

“Property is a key driver of economic growth in NSW and with reports the market in Sydney at least is starting to cool, the Baird government should realise that restricting foreign investment could exacerbate that exit of developers, which is not only bad for housing affordability but also for NSW’s continued economic growth.”

McGill describes property as a “hotly contested sector”, but says it’s still the goose that lays the golden egg as far as economic growth is concerned, especially now the mining boom has ended.

“It’s time for government to stop killing the goose,” he says.

About API

Founded in 1997, API is Australia's highest-selling property magazine.

Original author: API
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