After last month announcing that it would raise its stamp duty surcharge on foreign property buyers from 4% to 7%, the property lobby continues to swarm against the measure. From The AFR:
Foreign property investors are urging the South Australian government to grant them an exemption from a new surcharge on buying apartments in Adelaide’s CBD, warning that the market could otherwise collapse…
China Business Network of South Australia president Simon Hou said that without foreign investment, the apartment market in Adelaide could collapse.
Mr Hou, who also runs DG Real Estate in Adelaide, said…
“Can we please have an exemption for the CBD apartments because we do need those developers to come here to build buildings, create jobs … there’s more apartments to be built in the city and more people coming to Adelaide to live,” he said…
About a third of Mr Hou’s clients were foreign investors and most bought accommodation for their children while they attended university in Adelaide…
Property Council of SA executive director Daniel Gannon backed Mr Hou, warning that a tax on foreign investors would place significant residential developments in Adelaide’s CBD at risk…
“If developers now walk away from South Australia, it will be a direct result of the state government’s decision to increase this punitive tax.”
By raising its stamp duty surcharge from 4% to 7%, South Australia has merely brought its rate in line with New South Wales (8%) and Victoria (7%).
It is excellent policy as it will dampen foreign demand (at the margin), improving access for first home buyers, while also providing the State Government with $36.6 million of revenue over the next four years that can be used for the benefit of the resident population.
