Apartment stamp duty cut for overseas property buyers 10 months after new tax announced

WHY would they do this?

WHY are our governments so anti-Australian?

WHY do our governments favour foreign buyers over Australians?

With so many people renting, and so many people homeless and a so- called supply problem (i.e. a shortage of houses) why are our governments so keen to:

-restrict supply even further by allowing more homes to be bought by foreign buyers?
-see the cost of houses increase cutting out locals who would have more easily been able to afford to buy?

IS it because our governments are addicted to stamp duty cash flows?

IS this move to reduce this tax for foreign buyers an example of our governments dependence on such taxes and an admission they favour foreign buyers over those who elected them?

YET again we have been let down by Australian politicians, are they representing their constituents or foreign money?


Apartment stamp duty cut for overseas property buyers 10 months after new tax announced

By Jacob Kagi

26 OCTOBER 2019

Apartments under construction at Leighton Beach

PHOTO: The new buyer concessions apply to off-the-plan apartments. (ABC News: Emily Piesse)

RELATED STORY: Ailing property market boosted by big cuts to stamp duty, but only for certain properties

RELATED STORY: Fears budget property tax to hobble recovering market, as ‘significant’ properties remain exempt

The passage of laws last October to allow the WA Government to hit foreign property buyers with a substantial new tax was a cause of celebration for Labor.

“WA households the winners as foreign buyers surcharge is passed,” proclaimed the McGowan Government’s media release about the bill, which allowed any overseas buyer of property within the state to be hit with a 7 per cent tax.

And Labor’s spin doctors went on to accuse the Opposition of “colluding in an attempt to further burden WA families with the task of budget repair”.

“Despite a deceitful campaign of misinformation by both the Liberal and Nationals parties, who from the outset of this debate chose to support foreign property speculators over WA households, the legislation passed,” the media release stated.

But within a year, the Government quietly made a significant policy reversal on the tax — one that was made with much less fanfare.

A modern five-storey apartment complex.

PHOTO: Labor says the policy changes are designed to create jobs. (ABC News: Andrew O’Connor)

All quiet on the foreign property tax front

*This week Labor gathered three of its most senior MPs — Premier Mark McGowan, Treasurer Ben Wyatt and Transport Minister Rita Saffiotito a development under construction in South Perth to spruik a major new policy — a 75 per cent stamp duty discount for people buying off the plan apartments within the next two years.

“This is great news for housing and the construction industry,” Mr McGowan said on the day of the announcement.

“This is designed to create jobs, it is designed to bring forward developments and attract investment.”

Ben Wyatt talks in front of a flag and a WA Government sign.

PHOTO: Treasurer Ben Wyatt is adamant the changes are not a policy backflip. (ABC News: Rhiannon Shine)

The elephant in the room in the 35-minute media conference, and left out of the official media release celebrating the announcement, was what the changes would mean for the once-celebrated foreign property tax.

*The 75 per cent rebate would not serve just as a discount for local buyers, or even just as a stamp duty cut to overseas purchases.

*The discount would also apply to the foreign property tax, for any overseas purchaser buying a yet-to-be-built unit.

Within 10 months of the tax coming into force, the Government had quietly made a major concession to it.

*Foreigners would still pay more than locals for a new apartment. Mr Wyatt cited the example of a $620,000 unit, which would attract a $5,866 duty for West Australians and $16,865 for an overseas investor.

*But this was nowhere near as much as they would have had to fork out under a policy that came into force just 10 months ago.

Policy not a dud: Treasurer

Despite reversing course on a significant part of a key policy after less than a year, the Government was adamant it was not a backflip.

*And it rejected suggestions that the foreign property tax, which industry has complained has shattered demand, has been a dud.

“I do not accept that it has been a failure,” Mr Wyatt said.

“I think it is quite appropriate that foreigners contribute to WA infrastructure and I think it is a good policy.

“But what this policy does is ensure that West Australians as well get the advantage of a stamp duty concession.”

Infill apartments in Rivervale.

PHOTO: The Government argues foreign buyers will still have to pay more than local property purchasers. (ABC Radio Perth: Emma Wynne)

Mr Wyatt also insisted the policy had not affected the demand from overseas investors to buy WA property, despite industry leaders’ repeated insistence that it had.

The Liberals are not buying that explanation.

“This is a backflip, they are just trying to window-dress it,” Shadow Treasurer Dean Nalder said.

“But there is no question that this policy was a failure, it really hurt the housing industry.”

The alleged backflip, or policy shift at least, did not go as far as the Liberals have called for. They wanted a moratorium on the tax until the market recovers.

*And while there will be a significant discount to foreign buyers of new apartments, those buying existing properties will still be hit with the tax in full.

Labor continues to insist the foreign buyers tax is sound policy, but it is at the very least highly unusual for a Government to make a big change to a policy it introduced just a few months prior.