The NSW government should hit foreigners buying property in the state with a 3.0 per cent surcharge rather than 1.5 per cent if it is serious about improving housing affordability.
The surcharge on foreign investors that has been flagged as a possible measure in the June 21 state budget is a “good move” that will help ordinary Australians to buy property.
Foreigners buying property in Australia should be paying a tax but the 1.5 per cent surcharge that has been flagged isn’t high enough. They should be slugged with a 3.0 per cent 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.
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.
The Victorian government last year introduced a 3.0 per cent stamp duty charge and a 0.5 per cent land tax levy for foreigners. There has not been a noticeable impact on foreign demand for Victorian real estate since then and in fact the State Treasurer Tim Pallas has announced the stamp duty surcharge will rise to 7.0 per cent and the land tax levy to 1.5 per cent.
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.