Real estate experts have slammed the NSW government’s decision to add a 4% stamp duty surcharge on residential property bought by foreigners as nothing more than a “money grab”.
This home was the subject of controversy when it sold to a Chinese billionaire for $39 million.
The new charges are expected to pocket the government an extra $1 billion over the next four years, but their introduction has not coincided with any new schemes to help first home buyers, prominent industry figures say.
Gunning Principal Malcolm Gunning, a former president of the Real Estate Institute of NSW, says the decision should be recognised for what it is: “pure greed”.
“The government has found a scapegoat in foreign investors and is playing on xenophobia,” Gunning says.
“They are choosing to single out Chinese investors when the real reason house prices are being pushed up is self-funded retirees who are purchasing properties for their super funds.”
The surcharge came into effect on June 21. The government also announced a 0.75% land tax surcharge for foreign owners from the 2017 land tax year.
“The government will make $1 billion over the next four years from foreign investors, but refuse to make life easier for first home buyers by way of incentives for the purchase of existing properties,” Gunning says.
“It is important to recognise that this is just a grab for cash from the government and a cop-out,” he says.
Laing and Simmons managing director Leanne Pilkington agrees that the new charges on investors are a wasted opportunity to help first home buyers.
“We have a situation where the NSW Government has imposed additional stamp duty and land tax surcharges for foreign investors … but no plan to redistribute this enormous weight of funds to first home buyers, who need it most,” Pilkington says.
“The impact of these additional taxes is more likely to be felt at the top end of the market, which is not the domain of first home buyers anyway, and is therefore no solution to the affordability crisis our first home buyers face here and now,” she says.
Date: 5th Jul 2016
Author: Aidan Devine