Foreign property investors will be slugged more land tax in the ACT as part of Government moves to ‘rebalance’ the housing market in favour of local buyers.
But the Opposition says the move would only hurt the economy and increase rents.
Chief Minister Andrew Barr said that from 1 July, foreign investors would pay an additional annual land tax surcharge of 0.75 per cent on the average unimproved value of their residential properties in the ACT.
“The surcharge, which is included in the upcoming ACT Budget Review, is one of a suite of measures introduced by the ACT Government to assist local home buyers,” Mr Barr said. “It also brings the ACT into alignment with New South Wales, which introduced a land tax surcharge for foreign investors in 2017.”
Mr Barr said the charge was estimated to raise around $4 million in additional revenue from 2018-19 to 2020-21.
“The charge will only apply to foreign investors. ACT and Australian residents will not pay the new charge, and neither will homeowners who live in their property. Further details of the surcharge will be released as legislation is tabled,” he said.
Opposition Leader Alistair Coe said Mr Barr should be focused on releasing more land for free-standing houses.
“The real issue in Canberra is the lack of land being made available for free-standing family homes. Instead of releasing land, he is going for a tax grab that will either drive up rents or devalue the purchases of owner-occupiers,” he said.
Mr Coe said the Chief Minister had spent hundreds of thousands of dollars travelling overseas to attract foreign investment and now he was saying he doesn’t want foreign investment.
“ACT Labor has demanded thousands of apartments be constructed and now he is trying to stop people from buying them. The foreigners who do buy them as an investment will now have to charge more for rent to recover the increased costs,” he said.
The latest data from CoreLogic shows that the median price of a house in Canberra is $669,642, with units at $431,048.
Do you think increasing land tax for foreign property investors will help local home buyers? Share your thoughts by commenting below.