Higher taxes for foreign investors will hurt WA’s growth

An extra 4% tax on foreign buyers of residential property in WA will slow economic growth, reduce housing diversity and affordability at a time when we should be encouraging foreign investment to grow WA.

A recent survey of the property industry revealed that 93.1% of respondents believed an additional 4% surcharge on foreign investors would have a negative impact on the growth outlook for the WA property industry.

“Taxing foreign investment jeopardises our international reputation as being open for business,” Property Council WA Executive director Lino Iacomella said.

“International investors can choose to invest anywhere they like, the harder we make it for them, the less viable Perth becomes.

 “WA has the lowest level of foreign investment in residential property in Australia and putting an extra tax on foreign buyers will lead to a loss of confidence from overseas investors looking to invest where governments have stable tax settings

“Taxing foreign investors will do nothing to address WA’s housing affordability issue.  If anything, this tax has the potential to make matters worse.

“Developers need foreign investors to secure funding to ensure projects go ahead. If the number of foreign investors falls, these projects may never make it to fruition. Less supply of housing will drive prices upwards, making housing even less affordable for West Australians.

 “Industry agrees, 76.7% of respondents believed the 4% surcharge would result in less property sales, 73% also thought the surcharge would impact ability to raise capital for project finance.

 “We are calling on all the major parties to speak to industry about effective tax reforms that will attract more investment in WA property, and dump the idea of a foreign investment tax,” Mr Iacomella said.

 Media contact:  Lino Iacomella  |  M  0417 501 974   |   E  liacomella@propertycouncil.com.au