Property pundit wants foreign buyers “slugged” with higher tax

Adam Smith 31 May 2016

money jarThe head of a property agency has called on the NSW government to “slug” foreign buyers with a surcharge on property.

The NSW government has flagged a 1.5% surcharge for foreign buyers as a possible measure in the upcoming 21 June state budget. IBuyNew chief executive Mark Mendel has praised the idea, but has argued that the 1.5% surcharge doesn’t go far enough.

“They should be slugged with a 3% surcharge instead. By charging foreigners a higher surcharge, this gives the ordinary Australian property buyers a fair go at purchasing their own property,” Mendel said.

Mendel argued a higher surcharge would see foreign buyers contributing financially to the communities in which they buy.

“I believe it is a fair proposition for foreign buyers of real estate, who enjoy the benefits of capital growth from the property they purchase, to help contribute to the infrastructure and liveability of the communities they are investing in via this tax proposal,” he said.

Mendel pointed to a similar measure introduced last year by the Victorian government, which he said has not dampened foreign demand for property in the state.

“There has continued to be a steady stream of foreign interest in Australian real estate despite these charges which are helping to ensure communities benefit from the best services and infrastructure.”

The proposed measure has drawn criticism, however, from the Urban Taskforce. Chief executive Chris Johnson argued the measure would slow housing approvals in NSW.

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