Overseas investors are to see taxes on purchases of Sydney property double as part of a state government package aimed at appeasing voter anger about sky-high housing costs.
The foreign investor stamp duty surcharge in New South Wales will rise from 4 percent to 8 percent, effective July 1, New South Wales Premier Gladys Berejiklian said in a statement yesterday.
The surcharge is in addition to normal New South Wales stamp duty, which can be as high as 7 percent for the most expensive properties.
Additionally, the annual land tax on foreign homeowners is to rise from 0.75 percent to 2 percent.
Stamp duty concessions for investors purchasing off-the-plan properties, popular with foreign buyers, is to be abolished.
The crackdown on foreign investors is part of a wider package aimed at boosting housing affordability in Australia’s most populous state.
As a mining boom tails off, New South Wales has taken over as Australia’s economic engine, with central Sydney contributing almost a quarter of the nation’s economic growth last fiscal year.
That success has come at a price. As workers flock to Sydney, an undersupply of housing, coupled with record-low interest rates, has made the city the world’s second-most expensive property market.
Prices have risen 75 percent in the past five years.
The pace of price growth has cooled as some lending restrictions are starting to bite.
Australian house prices last month fell for the first time in 17 months, according to CoreLogic Inc data released yesterday.
Berejiklian, who took over the top job in late January, has made housing affordability her top priority.
“I want to ensure that owning a home is not out of reach for people in [New South Wales],” she said in the statement.
The package also includes stamp duty concessions for first-time homebuyers, a shake up of the planning system and increased investment in infrastructure.
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