Slugging foreign property investors with an extra tax would have a profound effect on South Australia’s property industry, warns the Urban Development Institute of Australia.
On the eve of the state budget, to be handed down on Thursday, UDIA’s SA executive director Terry Walsh said South Australia must not follow the lead of the Victorian Government, which proposes a 3 per cent additional stamp duty surcharge on real estate purchases by foreign buyers.
“Treasurer [Tom] Koutsantonis must recognise that growth of new housing in SA is much slower than in Melbourne or Sydney, and must not be tempted to follow Victoria and introduce the same budgetary measure here,” Walsh said.
“In fact, the South Australian Government should actively attract foreign investors to come to Adelaide, invest their money in our property projects and provide housing opportunities at attractive prices for our people.
“This could be a significant point of difference for Adelaide when foreign investors are weighing up where to spend their money in Australian cities.”
His warning follows comments last month by Real Estate Institute of SA CEO Greg Troughton, who told InDaily that any disincentive to foreign investment was “the last thing South Australia needs”.
Like Walsh, Troughton said Victoria’s move could make South Australia a more attractive option for investors.
However, Koutsantonis has previously refused to rule a foreign buyers’ tax on property sales “in or out” of the state budget.
“In terms of any decision we’re going to make, I’m not pre-empting anything in our budget leading up to it,” he said last month.
Walsh said that while the Victorian Government proposal was expected to raise revenue of several hundred million dollars, it was also likely to reduce the supply of dwellings to renters and therefore increase rental prices.
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