The Urban Development Institute of Australia (UDIA WA) is backing the state’s Opposition plan to vote against the introduction of the McGowan government’s foreign buyer’s tax on residential property.
“UDIA has been calling for the cancellation of the introduction of a Foreign Owner Duty Surcharge or ‘foreign buyer’s tax’ since it was flagged in the state budget last year,” UDIA WA CEO Allison Hailes said.
“We are fully supportive of the opposition parties aim to block the passage of the legislation through Parliament given the detrimental impact it will have on the property market recovery in WA,” Ms Hailes said.
“Furthermore, this new tax is contradictory to the state government’s recent announcements about wanting to attract more foreign students to come to WA to study and thereby contribute to our economy,” Ms Hailes said.
“On the one hand we have the government announcing incentives for more international students to study here, which is a fantastic initiative, and on the other they are planning to introduce a new tax for those same students and their family, if they choose to purchase a property to live in, while they are here. It just doesn’t make sense,” Ms Hailes said.
“The government needs to review this policy approach and ensure it supports its broader objectives of growth and job creation, rather than looking for a small, short term revenue gain,” Ms Hailes said.
Initially proposed as a 4% tax in last year’s state budget and raised to 7% in this year’s budget, the tax is intended to come into effect in January 2019.
“The WA property market is in the very early stages of recovery and, given foreign investment in the property market is integral to the success of the market and the wider WA economy, we have strongly urged the government to reconsider the imposition of a tax that directly detracts from investment in WA property,” Ms Hailes said.
“It is critical that investing in land and housing in WA remains an attractive proposition,” Ms Hailes said.
“WA’s current lack of a tax surcharge on foreign investment provides WA with a competitive advantage over other states in Australia and to take that away now, will only further hinder much needed investment into this state,” Ms Hailes said.
“With the economy as it is, we think it is imperative that the Government rethinks this flawed policy and instead works with industry to ensure that the property development sector is supported to build a prosperous future for WA,” Ms Hailes said.
“Without a strong land and housing development industry we will see further job losses and less money flowing into the state’s economy from the land development, building and construction sectors as well as the suppliers that support them,” Ms Hailes said.
“The property industry represents approximately 12.3% of Western Australia’s Gross State Product, contributing $30.45 billion annually to our economy and $251.7 billion nationally,” Ms Hailes said.
“The industry also employs approximately 230,000 Western Australians and over 2 million Australians across the country,” Ms Hailes said. “Why would a government jeopardise the health of an industry that’s so critical to the state, for the sake of a few million dollars in taxation revenue?”
Ends.
For more information:
Gemma Osiejak
UDIA WA Executive Manager Communications & Marketing
E: gosiejak@udiawa.com.au
M: 0421 506 819