Ensure you never miss an issue of the
real estate business bulletin
Inquiry turns spotlight on possible new foreign investor taxes

Inquiry turns spotlight on possible new foreign investor taxes

by Staff Reporter 0 comments

The possibility of new special charges being imposed on foreign investors snapping up Australian real estate should be under consideration, according to a federal parliamentary inquiry. 

With new UBS data showing foreign investors are likely fuelling Australia's housing boom - potentially buying up to 40 per cent of all new homes and up to one in eight Australian sales overall - the inquiry discussed what the possible effects of a special tax, fee or increased stamp duty on foreign buyers may be.

Committee chair Liberal MP Kelly O'Dwyer asked about the potential impact of the charge at the inquiry on Friday, with CBRE's Justin Brown indicating increased charges in cities including Singapore and Vancouver had changed the investment preferences of international real estate investors.

However, Reserve Bank of Australia (RBA) assistant governor Christopher Kent told the inquiry that rising house prices in the past 12 months have been driven by low interest rates and a growing population, rather than foreign investors.

In response to a possible special tax on foreign investors, Mr Kent said he couldn't “speak for the bank as a whole, [but] would it have an impact? One would imagine at the margins that it would".

If the move were to been given the green light, it would raise extra revenue for the federal coffers while also curbing excessive property demand from overseas.

The inquiry also recommended that extra data be collected around whether buyers are citizens, permanent residents, temporary residents or overseas investors.

Earlier this month, Residential Property Manager's sister title, Real Estate Business, reported that wealthy foreign investors buying homes and letting them sit vacant in order to avoid detection by the Foreign Investment Review Board (FIRB) needed urgent regulatory attention.

Inquiry turns spotlight on possible new foreign investor taxes
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?