WA budget slug to overseas property buyers will hurt real estate market, industry warns
The measure, confirmed by Treasurer Ben Wyatt, is expected to be unveiled in detail in this afternoon's state budget.
While the surcharge was restricted to residential property, Mr Wyatt said "significant residential developments" would remain exempt. It is unclear what qualifies a property as a "significant" development.
The move represents an increase on previous plans for the surcharge of 4 per cent, which was due to come into effect from January 1.
Real Estate Institute of WA president Hayden Groves said it was a "remarkable" decision by the WA Government.
"By adding another 3 per cent to 7 per cent, what it effectively will do is just disincentivise further any foreign investment in Western Australian property," Mr Groves said.
"That's a real pity because A) we don't have a lot of it in the first place, and B) we need it to make sure projects get (off) the ground."
Mr Groves said stamp duty taxes were inefficient and hampered growth.
"We are only just recovering in the Perth property market and this will certainly slow down and damage the recovery," he said.
Foreign buyers to 'assist in budget repair'
Mr Wyatt argued the surcharge would provide the state with a much-needed revenue boost.
The change from 4 per cent to 7 per cent will put an extra $50 million into WA's coffers over the next four years.
"I don't think any Western Australian would think it was unfair for foreign owners of residential property, who benefit from our services and infrastructure, to assist in budget repair," Mr Wyatt said.
"It is something I think most West Australians would find fair and reasonable."
The move can only go ahead if it receives the approval of State Parliament's Upper House, where the Government does not have a majority, but Mr Wyatt said he was optimistic about that.
"I am hopeful this will receive positive support," he said.
"It has been part of conversations we have had with Upper House members for a long period of time now."
Tax increases not ruled out
Mr Wyatt said the policy did not represent another breach of Labor's pre-election pledge not to increase taxes, saying the party had explicitly said that commitment applied only to West Australians.
While the Government has not ruled out other tax increases, Mr Wyatt has repeatedly said his budget has focused on supporting the state's economic growth.
Household fees and charges are expected to increase significantly, however, with water rates to rise by 5.5 per cent on average and much more for the biggest residential users.
Last year's budget predicted power prices would rise by seven per cent, with the Liberals worried the boost to household costs will hit struggling families hard.
Source: ABC News
Updated
http://www.abc.net.au/news/2018-05-10/wa-budget-foreign-property-buyers-surcharge-increased/9744670