(Bloomberg) -- Overseas investors will see taxes on purchases of Sydney property double as part of a state government package aimed at appeasing voter anger about sky-high housing costs.
The foreign investor stamp duty surcharge in New South Wales will rise to 8 percent from 4 percent, effective July 1, Premier Gladys Berejiklian said in a statement Thursday. The surcharge is in addition to normal New South Wales stamp duty, which can be as high as 7 percent for the most expensive properties.
Additionally, the annual land tax on foreign homeowners will rise to 2 percent from 0.75 percent. Stamp duty concessions for investors purchasing off-the-plan properties, popular with foreign buyers, will be abolished.
The crackdown on foreign investors is part of a wider package aimed at boosting housing affordability in Australia's most-populous state.
As the mining boom tails off, New South Wales has taken over as Australia's economic engine with central Sydney contributing almost a quarter of the nation's economic growth last fiscal year. That success has come at a price. As workers flock to Sydney, an under-supply of housing, coupled with record-low interest rates, has made the city the world's second-most expensive property market. Prices have risen 75 percent in the past five years.
Some Cooling
The pace of price growth has cooled as some lending restrictions are starting to bite. Australian house prices fell in May for the first time in 17 months in May, according to CoreLogic Inc. data released Thursday.
Berejiklian, who took over the top job in late January, has made housing affordability her top priority. “I want to ensure that owning a home is not out of reach for people in NSW,” she said in the statement.
The package also includes stamp duty concessions for first-time homebuyers, a shakeup of the planning system and increased investment in infrastructure.
To contact the reporter on this story: Emily Cadman in Sydney at ecadman2@bloomberg.net.
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Peter Vercoe, Sree Vidya Bhaktavatsalam
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