Let s have the facts not fear on foreign investment

Home Media Releases Let s have the facts not fear on foreign investment

Let’s have the facts not fear on foreign investmentThe Property Council of Australia is calling for a facts-based debate on the Government’s proposal to introduce a federal stamp duty for foreign purchases of Australian real estate.Chief Executive Ken Morrison said that anecdotal claims of foreign buyers driving up house prices and locking out potential first homebuyers are simply untrue.”There is no evidence to support the claim that foreign investment is pushing house prices up or first home buyers out,” Mr Morrison said.”Foreign investment puts downward pressure on house prices and helps bring on new housing construction, which increases the opportunities for Australians to get into the property market.”FACTNew home building nationally reached its highest level on record in 2014, hitting 193,000 commencements on the back of foreign investment but Australia still faces housing shortages.FACTWithout new housing supply, house prices will continue to rise.FACTForeign investors are prohibited from buying established homes.FACTExisting homes can only be purchased by temporary residents and must be sold when they leave Australia.FACTForeign investors do not compete with first homebuyers: foreign investors can only buy newly developed property under existing FIRB rules and 80 percent of first homebuyers purchase established housing stock, according to ABS data.FACTEvery newly constructed home that a foreign investor purchases enables up to four other homes to be built.FACTIn the last financial year, temporary residents were only granted around 7,000 approvals to purchase, less than 1.5 per cent of the total number of properties transacted in that year – nowhere near enough to impact house prices.FACTAustralia already has some of the toughest rules for foreigners buying residential property in the world – second only to Switzerland.FACTThe Government admits there are no compliance concerns with foreign investment in commercial real estate, but has proposed a new $25,000 fee for these purchases.”Evidence from industry shows that the majority of foreign investors buy in the mid $0,000 price range, and a new $00 tax in this price bracket would discourage many, in turn undermining new construction,” Mr Morrison said. “The key is to ensure the existing rules are properly enforced -driving foreign investors away is not the solution and only makes the problem worse. “The Federal Government is absolutely right to be concerned about housing affordability and safeguarding the Australian dream of home ownership, but it is going about it in entirely the wrong way. The Government’s plan will backfire and will do more harm than good.”Perversely, driving away foreign investment by imposing big new fees will only make it harder for first homebuyers to enter the market and make houses more expensive.”This announcement is extremely disappointing from a government that promised less red tape, no surprises, no new taxes and a tax review to eliminate inefficient ones. Now they are doing the complete opposite, introducing an inefficient new tax and more complex administration.”The fees proposed are far in excess of the $1,0 recommended by the parliamentary inquiry and supported by industry. “The Government has conceded that these new taxes are a cash grab with the $200 million they are forecast to raise far exceeding the revenue needed for the increased compliance and data collection we so strongly support.”ASIO’s annual budget is $435m. The task of maintaining a foreign purchasers register and better compliance does not compare with the resourcing needed to keep Australia safe from terrorism.”Ultimately these additional costs will be passed on to local consumers, through higher rents and house prices.”The negative flow-on effects from any fall in residential construction to other sectors of the economy must also be considered.”It will affect everything from unemployment rates to international student numbers – one of Australia’s top three exports.”Media contact: Fiona Benson 0407 294 620