Populist foreign taxes damage housing supply

Housing supply in our major capital cities is being put at risk by counter-productive taxes on foreign investment, according to the Property Council of Australia.

New South Wales has joined Queensland and Victoria in imposing surcharges on foreign investment.

"We've now got a race to the bottom on populist taxes that do nothing to fix housing supply or improve affordability," said Glenn Byres, the Property Council's Chief of Policy and Housing.

"Let's call this for what it is - a cash grab from states prepared to play to the crowd on foreign investment and put at risk Australia’s reputation on the global stage.

"Mike Baird is channelling Bob Carr and the failed vendor duty – introducing a bad tax at a bad time and inflicting damage on the housing construction industry.

“We are already seeing signs that tighter lending conditions are having an effect on the market, and the trend is that approvals and commencements have passed the peak.

"As the Prime Minister says, if you want less of something, you tax it more.

“You also give up any pretence of being a global city if you increase taxes on foreign investment.

"Offshore investors account for about 15 - 20 per cent of pre-sales in our capital cities and help switch projects from concept to construction.

"This helps maintain a supply pipeline crucial to close the demand gap, lifts affordability and every new home constructed supports up to 40 jobs.

"If the states want to boost affordability, they would take responsibility for fixing their dysfunctional planning systems that add to the cost of new homes through red tape.

“They would also remove stamp duty, the biggest barrier to home ownership, which adds up to $60,000 over the life of an average mortgage.”

Media contact:  Glenn Byres | E gbyres@propertycouncil.com.au