The NSW government should double the surcharge placed on foreign investors buying property in the state to improve housing affordability, an online property agency has argued.
iBuyNew CEO Mark Mendel has called on the state government to mandate a 3% surcharge on foreign investors purchasing Australian real estate. Earlier this month, the prospect of applying a foreigner land tax surcharge of 1.5% in the next state budget was raised.
“Foreigners buying property in Australia should be paying a tax but the 1.5% surcharge that has been flagged isn’t high enough,” Mendel said.
“They should be slugged with a 3% surcharge instead. By charging foreigners a higher surcharge, this gives the ordinary Australian property buyers a fair go at purchasing their own property.
“A higher surcharge will also allow foreigners to help contribute additionally to communities in the areas where the tax is collected.”
NSW isn’t the only state to up tax for overseas buyers. Last month the Victorian government increased taxes further on foreign home buyers in its 2016-17 state budget. The announcement saw the foreign investor stamp duty surcharge increase to 7%, from 3% announced in last year’s budget.
“I believe it is a fair proposition for foreign buyers of real estate, who enjoy the benefits of capital growth from the property they purchase, to help contribute to the infrastructure and liveability of the communities they are investing in via this tax proposal,” Mendel said.
“There has not been a noticeable impact on foreign demand for Victorian real estate since [last year] and in fact the State Treasurer Tim Pallas has announced the stamp duty surcharge will rise to 7% and the land tax levy to 1.5%.
“There has continued to be a steady stream of foreign interest in Australian real estate despite these charges which are helping to ensure communities benefit from the best services and infrastructure.”