A letter to the treasurer.
Dear Ms. Gladys Berejiklian,
We write to you to express our concerns regarding the increase of stamp duty and land tax on foreign investors. Last Tuesday you increased stamp duty and land tax for foreign investors. This is on top of your federal counterparts changing foreign investment rules. Your federal counterparts now charge $5,000 for FIRB approval and take 10% for every foreign buyer who sells a property in excess of $2 million.
We hope that this is not an act of government greed. It is determined on good policy, considerations and on the better outcomes for the Australian economy.
We understand that the corporate knowledge in government has dissipated. All public servants who had skills have accepted voluntary redundancies as a means of better suiting the government balance sheet. The problem with getting rid of good people is that people forget what goes wrong when government policy is ill informed.
Since federation, property on the east coast of Australia has had investment from overseas. Irrespective of boom and bust, somewhere between 5 and 10% of buyers are from overseas. If we eradicate this percentage of purchasers from the marketplace, do we run the risk of killing the golden goose?
Government in the past 12 months have limited loans from banks to local investors, have limited advice from financial planners and now are punishing foreign investors. We know that some of this is your federal counterpart, however attacking both local and foreign investment may prove to crush the marketplace. You may not have realized that, the heat is already out of the marketplace and property prices have peaked.
As leverage review has pointed out previously, when government intervenes in the property market, the property market becomes repressed. This means that, no one is a winner.
In 2018 a number of developments are due to settle. Where is the market if neither the local purchaser can borrow, nor the foreign buyer invest? These policies may have positive budget outcomes, but we fear the affect on the market.
Yours Faithfully,Australian Property Divesters
Australian Property Divesters