South Australia is looking to encourage overseas investment in property, unlike other states in Australia who have increased taxes for foreign investors.
The Treasurer for South Australia, Tom Koutsantonis has announced that there will be no extra charges on foreign property investors in residential real estate, in contrast to the eastern states.
As previously reported, extra charges have already been implemented or scheduled in eastern states of Australia. In New South Wales for example additional stamp duty of 4 per cent for foreign investors is already in place and a separate land tax surcharge of 0.75 per cent is due in 2017.
In Victoria tax is even higher for foreign investors with additional stamp duty having been increased to 7 per cent in the last budget.
Likewise Queensland is scheduled to introduce an extra 3 per cent transfer surcharge for foreign buyers of residential property from October this year.
However Mr Koutsantonis said: ‘I will not be doing anything that in any way hurts foreign property investors, these types of taxes have no place in this country.
He confirmed that he wanted to actively encourage more foreign investment in South Australia across all sectors of the economy, including residential and commercial property.
‘I want more foreign direct investment,’ he said. ‘We’re a trading nation, we’re a trading state.’
The news was welcomed by Daniel Gannon, South Australian executive director of the Property Council of Australia, who said that by ruling out any tax increases for offshore property investors, the state now had another competitive advantage when it came to property taxes.
‘The message to investors is now very clear. If you want to pay lower taxes on property transactions, then invest in South Australia,’ Mr Gannon said.
The residential property market has risen by 3.9 per cent over the last year, slower than that of Sydney and Melbourne both over 13 per cent. But this tax advantage may be just what the market needs to boost growth.
Property investors interested in Australia may want to look south for the best opportunities.