The Property Council of Australia is urging the NSW government not to turn its back on foreign investors, saying that increasing land tax and stamp duty for foreigners will only make it harder for families to find affordable housing.

The Daily Telegraph has reported that NSW Teasurer Gladys Berejiklian is considering a 1.5% foreigner land tax surcharge to "tackle housing affordability".

NSW Executive Director of the Property Council of Australia, Jane Fitzgerald, said new taxes would not increase housing supply or housing affordability.

“NSW needs more housing – a decade of under supply is responsible for Sydney’s housing crisis,” Fitzgerald said.

“Turning investors away, by imposing a huge new tax, is one way to ensure it doesn’t get any better.

“Talk about sending the wrong message to the rest of the world. You can’t aspire to be a world leading global city and whack a huge new tax on foreign investors at the same time,” she said.

Ms Fitzgerald said that with the Victorian Government’s imposition of these taxes over the past 12 months, NSW, especially Sydney, has a competitive investment advantage.

“Nationally, foreign investment is underpinning Australia’s record levels of new housing construction, rather than stopping Australians from buying a home foreign investors are helping them do just that,” Fitzgerald said. 

“Given current economic conditions, it would be a gravely risky strategy with implications for both housing supply and housing affordability in NSW,” she said.

“There are international investors right now considering whether to build residential housing in NSW. If they choose to go elsewhere our housing affordability crisis will worsen,” she said.

See also:

Withholding tax for foreigners adds to red tape.

Last of the big four closes doors on foreigners.

Foreign buyer policies taking a toll, but not in Brisbane.