The South Australian state government has ruled out imposing extra surcharges on foreign investors in the state.
The announcement means South Australia will not be joining New South Wales, Queensland and Victoria who all recently announced tax surcharges on foreign investors as a part of their state budgets.
Property Council of Australia SA executive director, Daniel Gannon, said he is pleased with the outcome. He said imposing extra charges is a big risk to the property market.
“Slapping counter-productive taxes on foreign investment is a great big risk for housing supply in our major capital cities.
“What we're seeing in Queensland, Victoria and NSW is a race to the bottom on populist taxes that fail to address housing supply or improve affordability.”
Gannon said the South Australian government’s decision will boost investment in the state.
“In shaping a thriving future for South Australia, we need to create a business environment that turns our state into a hub of innovation and investment. Lowering our tax regime and cutting red tape will help attract investment and lift productivity.
“The State Government's commercial stamp duty changes, once phased in by July 2018, will make our economy one of the most competitive places in Australia to do business.
“That will create the boost to business confidence that we need and send a strong message to foreign investors.”
According to research from the Property Council of Australia, property is the largest single industry contributor in South Australia, paying 56.6% of state taxes, local government rates, fees and charges. It accounts for 10.8% of the state's economic activity and is the largest private sector employer.
“The message to investors is now very clear: if you want to pay lower taxes on property transactions, then invest in South Australia,” Gannon said.