At the beginning of October specifically the 9th of October a legislation passed to have a 7% surcharge to Foreign buyers. The idea was to raise funds for the government in excess of $120 million over the course of 4 years.
The Finance minister Ben Wyatt said ‘it was the right result for the state to have foreign buyers contribute to the which these funds are set to repair the budget.
WA is now in line with other Australian states, all of which have introduced a foreign buyer surcharge. The Real Estate Institute of Western Australia (REIWA) expressed its disappointment in the members of the WA parliament for voting to pass the surcharge. It comes a month after the industry group aired its concerns and urged its members to oppose the move.
REIWA President Damian Collins said ” The WA property market has endured a challenging few years. We are just starting to see the green shoots of 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 f foreign investment among the states, behind Northern Territory. It is the belief that this tax will discourage people further from investing.
Foreign buyers are essential to the recovery of the market. Although they may make up only a small portion of the sales it is a portion we cannot afford to loose. Especially when there are just some signs that the market could be recovering.
The new 7% surcharge will commence in January 2019.