World

NSW doubles property taxes for foreign buyers

SYDNEY: Australia's most populous state will double property taxes for foreign buyers, the New South Wales treasurer said yeaterday.

The move is aimed squarely at Chinese investors and appeasing voters worried about housing affordability.

The push comes amid a raft of regulatory action to cool a hot housing market, especially in the country's east, and as concerns grow that foreign buyers have priced many locals out of the market.

The new charges, effective next month, come just as the frothy sector is already showing cracks, with prices slipping in Sydney and Melbourne last month, according to figures published by CoreLogic on Tuesday, after dramatic gains of more than 15 per cent over the 12 months to April.

A surcharge collected from foreigners on home sales will rise from 4 per cent to 8 per cent, while a land tax for foreigners is also being raised, New South Wales Treasurer Dominic Perrottet said.

Victoria state made a similar move a year ago.

The national government, in it's budget earlier last month, imposed fines for foreign owners with properties vacant for at least six months of the year, as well curbs on the kinds of property available to foreign purchasers.

Chinese investors are likely to be hit hardest, as they are the largest foreign buyers in Australia's property sector, ploughing two-thirds of a total A$47.3 billion (S$48.8b) into the property market in the 2016 financial year.

"I think it will heavily discourage their investment," said Mr Ted He, managing director at CLG Corporate, a firm that advises Chinese property investors. - REUTERS

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