On Wednesday, the Real Estate Institute of Western Australia (REIWA) expressed its disappointment in the members of Western Australia (WA) Parliament for voting to pass the Foreign Owner Duty Surcharge tax.
This comes a month after the industry group aired its concerns and urged its members to oppose the move.
Bringing up the possible repercussions once again, REIWA President Damian Collins pointed out how the new tax could hurt the market, together with the foreign investments.
“The WA property market has endured a challenging few years. We are just starting to see the green shoots of a recovery on the horizon. A new tax will only serve to further dampen our already weak market and deter much needed foreign investment from the state. “
Western Australia has the second-lowest level of foreign investment among states, behind the Northern Territory. REIWA believes that the tax will be discouraging to people who would otherwise want to migrate and live in WA.
Collins added that foreign buyers are essential to the recovering market. “Although foreign buyers only make up a small proportion of the WA market, it’s a proportion we can’t afford to lose. Especially at a time when the market is showing signs of stabilising,” he said.
In September, the WA Labor Government announced that it would take after the other states and increase stamp duties on foreign buyers of residential property to 7% starting next year. Now that this plan has been formalized, foreign buyers of residential properties in Western Australia are expected to pay 7% surcharge starting January 2019.