ajayayyarParticipant@ajayayyarJoin Date: 2005Post Count: 175
I’ve recent heard a lot of talk about the government introducing schemes to prevent/limit the influence of Asian buyers on the Australian property prices. Can someone shine some light on the restrictions and what it means from a short/med/long term perspective, as I’ve been hearing a lot of conflicting commentary on this?
AjaySteve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,729
Yes, you are correct. Many State governments have introduced additional stamp duty for foreign buyers (note that there is no discrimination against Asians as such). Some State governments have also introduced an additional land tax component.
The Federal government is also in on the act by phasing out access to the CGT discount while also increasing withholding on sales by foreign property owners and somehow charging foreign owners who leave their properties vacant.
We’ll have to wait and see how effective these new measures will be.
On one hand the additional taxes may strangle the foreign golden goose buying up (mainly) off-the-plan properties – which in turn supports construction, jobs and GDP. On the other hand, if their aim is capital preservation (as is the case for some Chinese investors who just want their money out of China), then a little extra cost is unlikely to worry them if the bulk of their capital is safe.
Keep an eye on the movement in property prices. As we come into Spring, and with a spike in off the plan properties due to hit the market soon, if the additional demand for housing does not match the increased supply then prices should fall.
All the best,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
Success comes from doing things differentlyajayayyarParticipant@ajayayyarJoin Date: 2005Post Count: 175
Many thanks Steve! That was very helpful and definitely helps shape my thinking.
I’ll be sure to keep my eye on the market and will keep all of these points in mind.
AjayEric WuParticipant@ericwuJoin Date: 2017Post Count: 2
“On the other hand, if their aim is capital preservation (as is the case for some Chinese investors who just want their money out of China), then a little extra cost is unlikely to worry them if the bulk of their capital is safe.”
Hi Steve, you are spot on this. lots of Asian buyers are actually coming for the good value of Australian properties (relative to home). if we compare the same apartments ( locations, size, facility,..), here it is so much cheaper than Beijing, Shanghai, Guangzhou,and Shengzhen ( first tier mega cities in China).
Unless AU government stops these buyers, the increased fees and charges is less likely to stop them, which is a really good thing for AU local economy.
StevenParticipant@steven1982Join Date: 2017Post Count: 155
- This reply was modified 1 year, 6 months ago by Eric Wu.
If Australian Government truly wants phase out overseas investors, they can do what Canada government did… by charging 15% or more foreign buyer tax….
Don’t think Australian Government would resort to doing that any time soon.
You must be logged in to reply to this topic.