Foreign property investors in New South Wales will be hit with higher fees and taxes under proposed changes by the Berejiklian government. The measures are expected to raise nearly $2bn over the next four years to help the state’s struggling first-home buyers.
According to the measures, which were outlined last Thursday, the Foreign Investor Surcharge Duty will be doubled from 4% to 8%, while the annual land tax surcharge on foreign property buyers will rise from 0.75% to 2% annually.
Premier Gladys Berejiklian and Treasurer Dominic Perrottet are due to make an announcement about these changes, which will come into effect on July 1.
Meanwhile, stamp duty is set to be axed for existing and new homes valued up to $650,000. Stamp duty on homes valued up to $800,000 will also be discounted. Currently, the state’s stamp duty exemption is only available for purchases on new properties.
Perrottet hinted earlier this year that changes to aid first-home buyers were in the pipeline.
“The great Australian dream is to own your own home. While foreign investment brings an important flow of capital into NSW, my priority is to ensure Australians have that opportunity first,” he said.
The latest property investment data shows that one in every 10 buyers in NSW is a foreigner. Since its introduction in the 2016-17 federal budget, the Foreign Investor Surcharge Duty has collected $150m from 3,000 foreign buyers.
While the new measures have received a fair amount of support, the Property Council of Australia has urged the state government to observe caution when taxing foreign investors. “Like any market, if you tighten the screws too tightly, you may inhibit growth,” said Cheryl Thomas, the Property Council’s deputy executive director for NSW.