The new “foreign investor surcharge” announced by the South Australian Government could damage the state’s reputation as a good place to invest.
ABC News reports that real estate agents specialising in overseas investors are critical of the new levy.
The levy will raise the surcharge on foreign investor property settlements from 4% to 7% from January 2018.
Although other states have similar charges, SA will be the only state imposing the levy from settlement date, rather than the date the contract of sale is signed, according to DG Real Estate’s Simon Hou.
Hou told ABC News that hundreds of people who signed off-the-plan contracts before the levy was announced would be forced to cough up extra.
Hou added that since the announcement more than 50 potential investors had walked away from investment in SA.
In defense of the announcement, Treasurer Tom Koutsantonis said that off the plan buyers or those buying properties with a long settlement period, do so with the knowledge that levies can change.
But other agents have joined Hou in saying that the change will discourage foreign investment, having a significant negative impact on the SA market.
Source: ABC News