NSW’s Labor opposition announced this week that if in Government it would push to increase foreign buyers’ stamp duty surcharge in order to “level the playing field for the State’s first home buyers”.
The decision by the Foley Labor opposition came after findings from new figures released under freedom of information laws revealed more than one in 10 residential properties sold in NSW are being snapped up by foreigners, with a third of them bought by Chinese nationals.
Data from the Office of State Revenue shows that in the three months from July to September 2016, foreign nationals accounted for 11 per cent – or 2995 – of residential property purchases in NSW compared to 7.51 per cent by first home buyers.
“This policy is well thought through and costed – with one intention only – to make housing affordable in New South Wales. We’re levelling the playing field,” Opposition Leader Luke Foley said.
“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 the policies Labor intends to:
- Raise the Foreign Investor Stamp Duty Surcharge from 4 per cent to 7 per cent; and
- Double the Land Tax Surcharge from 0.75 per cent to 1.5 per cent.
The Urban Taskforce said NSW Labor’s intentions will slow down the supply of new homes.
“Sydney needs more housing supply not less,” Urban Taskforce CEO Chris Johnson said.
“So Labor’s proposal to lift the stamp duty surcharge from 4 per cent to 7 per cent and to double the Land Tax surcharge for foreign investors will be a clear signal that these investors are not wanted.
“The result will be to minimise this sector of the market and to therefore reduce housing supply.”
“The Urban Taskforce believes that increasing supply is the key game changer that is needed to help with housing affordability and that this can be done by speeding up housing planning approvals and by minimising extra costs being put on developers by councils and state government agencies.”
The Urban Taskforce’s developer members were recently asked for examples of where housing projects were stuck in the planning system, and said they were surprised to get a list adding up to around 40,000 new homes that were in limbo.
“It is concerning that in the media release by NSW Labor, Shadow Treasurer Ryan Park refers in a negative way to ‘developer mates’,” Mr Johnson said, referring to the Shadow Treasurer’s comment in Labor’s media release.
“The NSW Liberals approach housing affordability from the direction of helping investors and their developer mates. We’re on the side of people who want to buy their homes, and who are blocked at every stage by hostile Government policies,” Mr Park said.
“The only industry that is going to provide the massive number of new homes needed for Sydney is the developers but they have to battle a slow and complex planning system and manage as a result holding costs that can reach $500,000 a month for large projects,” Mr Johnson said.