Additional taxes for foreign investors on property purchases are unlikely to significantly quell activity in the Australian property market, according to a leading real estate group.
Chairman and owner of CENTURY 21 Australasia Charles Tarbey said additional taxes would be misguided.
“An additional tax on property is unlikely to take the heat out of the market as domestic demand has by and large been responsible for driving recent growth in prices,” said Mr Tarbey.
“CENTURY 21 has seen an imbalance of supply and demand in several local markets lately, another important driver of this price growth.”
Mr Tarbey said even though discussions around foreign investment are healthy for a developed economy – introducing additional tax measures could have the effect of deterring foreign buyers completely.
“If we take action to deter foreign buyers from investing in Australia today, when we need them to support our economy in the future, they won’t be interested,” he said.
According to the Foreign Investment Review Board (FIRB), proposed foreign investment residential real estate fell slightly in 2011/2012 to $19.7 billion, down from $20.9 billion in 2010/2011. More recent figures are due out in late December in FIRB’s annual report.