The NSW government is under pressure to lift stamp taxes for foreign home buyers after new figures showed they account for 11 percent of all sales.
Figures released under Freedom of Information laws from the NSW Office of State Revenue show that foreign citizens accounted for 11 percent of the 28,141 residential homes purchased in NSW from July to September last year.
Chinese purchased over 32 percent of those properties, followed by British and New Zealanders at 11 percent each and Indians at 10 percent. (Some of the best houses are being sold on Chinese social medai site WeChat.)
The figures reflect the period after the June budget when the NSW government imposed a 4 percent surcharge on stamp duty for property purchases by foreigners and a 0.75 percent land tax surcharge.
How house prices fared in 2016, according to CoreLogic CoreLogic
The tax hikes were supposed to reduce the share of foreigners in the overheated Sydney property market where prices climbed 18 percent in the past 12 months but the figures suggest they had little effect.
There is anecdotal evidence that foreign purchases are concentrated in certain metropolitan Sydney areas where prices are rising fastest.
The NSW Opposition which obtained the information has called on the NSW government to raise property taxes for foreign buyers even, higher lifting the surcharge on stamp duty to 7 percent and lifting the annual land tax surcharge from the current level to1.5 percent.
This would bring NSW into line with the surcharges imposed by Victoria last year.
ALP leader Luke Foley said lifting property taxes on foreign investors would ease the pressure on first home buyers who the figures show now account for just 7.5 percent of total sales.
Preliminary auction results for week to 26 February, 2017. CoreLogic
“Evidence suggests a surcharge on foreign investors will take some pressure off house prices and go a way to levelling the playing field for first home buyers. “Under our policy local families will get a fairer crack of getting into the housing market,” Mr Foley said.
NSW premier Gladys Berejiklian said on Tuesday that it was not clear that taxing foreign buyers cut prices for locals. “The jury is still out.” She said she imposed the surcharge as treasurer last year as a way of raising extra revenue.
It is understood the NSW government will argue that many foreign citizens who purchased homes in NSW were actually permanent residents who are not required to pay the stamp duty surcharge or obtain Foreign Investment Review Board approval. If these permanent residents are excluded, the proportion of sales to true foreign investors is as low as 1.5 percent.
Ms Berejiklian has said that improving housing affordability is one of her top priorities and named former Reserve Bank of Australia governor Glenn Stevens to advise her on solutions .
Agents like Monika Tu can sell a $10 million house on social media in days. Daniel Munoz
But she has rejected the Federal ALPs proposals to reduce the tax incentives for negative gearing and also rejected proposals from her own Treasurer Damien Perrottet to switch from stamp duty to land tax. She has said boosting supply is the best way to solve the problem.
The Office of State Revenue figures show that foreigners now account for about 15 percent of the state duty paid in the period, much more than their share of purchases which suggests the stamp duty surcharge is raising considerable revenue.
Premier Gladys Berejiklian says housing affordability is a priority. Peter Rae Read more : http://www.afr.com/real-estate/residential/foreigners-buying-11pc-of-nsw-homes-20170313-guxgc5