Foreign investor tax will cost jobs, limit finance and reduce sales
A survey of the WA property industry has revealed the wide-spread damage to the local property market that would result from an extra tax on foreign buyers, proposed by Labor in the state election.
Property businesses were asked how the foreign investor tax would affect the market outlook, how raising capital would be effected and what impact the tax would have on overall sales.
“The 4% tax surcharge on foreign investors in residential property would limit WA’s economic growth, constrain the ability of local businesses to raise development capital, and result in less real estate sales,” Property Council WA Executive Director Lino Iacomella said.
- 93% of respondents believed a 4% surcharge on foreign investors would have a negative impact on the growth outlook of the WA property market.
- 65% of respondents believed that the 4% surcharge would impact on the ability to raise capital for project finance, leaving many projects hanging in the balance.
- 81% of respondents believed that doubling the tax on foreign investors would drive away business, resulting in less sales.
“The WA real estate market has flat-lined for much of the last decade and the last thing we need is a new tax that will drive away potential buyers. It is the worst possible time to introduce a tax on foreign investors.
“Foreign buyers usually make up around 5% of real estate sales in WA and we need to double this to achieve our urban infill and diversity targets.
“Pre-sales to foreign investors in WA is essential to underwrite new multi-unit projects emerging around retail centres and train stations – and these are exactly the sorts of projects Perth needs to increase housing diversity and choice.
“Without the security from foreign investors, many development projects will not make it to the market, resulting in less job creation.
“Punishing those wanting to invest in WA now is a dumb idea and will have dire ramifications for the state economy,” Mr. Iacomella said.
Media contact: Lino Iacomella | M 0417 501 974 | E [email protected]