Property industry lobby groups have strongly denounced WA Labor’s plan to introduce a 4% tax on foreign buyers of residential property if it wins the state elections on 11 March, calling it a “retrograde step” for the economy and major blow to the job market.

WA Labor leader Mark McGowan recently made a pledge to impose a new surcharge on foreign property buyers in order to fund a freeze on Tafe fees in the first term of a Labor state government.
While Western Australia is one of the only states in the country that does not tax offshore buyers for investing in property, the state hasn’t experienced the same surge in demand from offshore investors.

Lino Iacomella, WA executive director of Property Council of Australia, has denounced the plan, saying it demonstrated a lack of understanding of WA’s property market.

“We have the lowest level of foreign investment in property in Australia, and putting an extra tax on foreign buyers will make it much harder to get the investment we need to grow the state,” Iacomella said. “Foreign buyers already pay the same stamp duty and land tax as the other buyers, and they’re very restricted in what they can buy – mainly limited numbers of new multi-units and apartments off-the-plan.”

John Gelavis, WA executive director of the Housing Industry Association (HIA), was also dismissive of the party’s plan, pointing out that foreign investment adds more houses to the dwelling supply, which in turn results in more rental properties and less pressure on rental prices.

“The imposition of any foreign investor stamp duty surcharge is likely to negatively impact new dwelling supply at a time we can least afford it, in particular for apartments,” Gelavis said. “Right now in the current property cycle, Western Australia needs to be open for business and encourage foreign investment in order to not only stimulate building supply but assist in rebuilding the state economy and delivering an increased level of investor confidence.”

Related stories:
Perth’s Median House Price Rose Slightly In December
Finding The Next Big Boom Town - Before Anyone Else
 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker