The state of New South Wales has doubled property taxes for foreign buyers. The purchasing tax imposed on overseas property buyers has been increased from 4% to 8%, and will come into effect next month.
The Australian government has made no secret of the fact that the move is aimed directly at Chinese property investors. Chinese buyers are the largest group of foreign buyers in the Australian property market, investing over AUS $30 billion into the property market during 2016.
The announcement comes just weeks after the introduction of fines for foreign owners who leave their properties vacant for at least six months of the year, while the type of property available to foreign purchasers in the first place has also been restricted. A land tax for foreigners is also in the process of being raised.
Concerns in the country have been growing regarding foreign buyers pricing many locals out of the New South Wales property market, however house price growth is just beginning to slow down.
According to figures release by CoreLogic earlier this week, property prices fell in both Sydney and Melbourne during May. But back in April, the Reserve Bank of Australia warned of rising housing debt stoking bubble risks in the property sector.
New South Wales Premier Gladys Berejiklian is reported as saying that the tax increase was part of a drive to put downward pressure on property prices and make it easier for local first-time buyers to make purchases.
