New property tax passes, tipped to dampen ‘stabilising’ market

“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,” Mr Collins said.

“WA has the lowest level of foreign investment of any state, second only to the Northern Territory. This ill-timed tax will place an additional barrier for people wanting to move to WA and set up a home.”

Mr Collins said that although foreign buyers only make up a small proportion of the WA market, it’s a proportion the state cannot afford to lose.

“Especially at a time when the market is showing signs of stabilising,” the REIWA president added.

But the Treasurer of Western Australia, Ben Wyatt, said that introducing the foreign buyers surcharge is a “smart and responsible” decision.

“This new revenue base will help put the budget on a more sustainable footing,” Treasurer Wyatt said in a media statement.

“We are bringing WA into line with other states and guaranteeing a new ongoing revenue source for years to come.”

The statement said that the surcharge has been introduced to pay for a freeze on TAFE fees and assist in the “difficult” task of budget repair.
 
The surcharge will apply from 1 January 2019 at the rate of 4 per cent on all purchases of residential property in Western Australia by foreigners, including individuals, corporations and trusts.