The new fees starting at $5,000 for foreign property buyers have been labelled a tax on investments, leading critics to argue that the new policy will fail to ease housing values across Australia.
While he said that the new tax on investments will “raise far more revenue than is needed to do the job”, Property Council of Australia chief executive Ken Morrison claims the fees are excessive.
“These fees are going to raise around $200m worth of revenue. ASIO’s budget is a little over $400m. You certainly don’t need an effort half the size of ASIO just to do compliance on foreign investment rules,” he was quoted as saying by The Australian.
Morrison also dubbed the government’s plan to raise $330m by taxing foreign homebuyers to be “alarming”.
“We certainly wouldn’t want other states to follow that example,” he said. “If we tax foreign investors out of the market, we will have a lot less supply, which of course is a lot less housing for Australians to buy. The federal government has set a dangerous precedent here.”
Meanwhile, the Australia Institute’s executive director Richard Denniss said the new fees would raise little revenue and was an “inefficient” way to cover increased compliance costs.
“This is a tax on foreign investment, but it’s a trivially small tax that will do little more than create a nuisance while doing nothing to address the underlying cause of rising house prices,” he said.
“If the government was scrapping the 50% capital gains discount or restricting negative gearing, it would generate far more money to fund any form of compliance it wants and it would simultaneously put actual downward pressure on the prices of Australian homes.”
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