Higher taxes on foreigners pitched to free up homes

Samantha Lock |

The NSW government is considering a higher tax for foreigners buying existing homes.
The NSW government is considering a higher tax for foreigners buying existing homes.

Foreign buyers could be slugged with higher taxes for buying existing NSW homes as the government looks for ways to address the housing crisis.

NSW Treasurer Daniel Mookhey said the state was grappling with a problem of overseas investors leaving properties vacant and not putting them out to rent.

“We don’t have many levers we can pull which can lead to a quick return of housing stock to the rental market,” he told Sydney radio 2GB on Wednesday.

NSW Treasurer Daniel Mookhey.
NSW Treasurer Daniel Mookhey feels a higher foreign buyer tax could free up more homes. (Dan Himbrechts/AAP PHOTOS)

About 63,000 properties – almost equal to the total number of homes built in NSW every two years – were sitting vacant, Mr Mookhey said.

The government is looking to regimes in place in other states, including Victoria and Queensland, to see what could work best.

Under existing arrangements, most foreign buyers are subject to an eight per cent surcharge on residential property purchases.

“That hasn’t changed since 2017 (but) I think the market conditions have clearly changed,” Mr Mookhey said.

A tax hike in line with Ontario in Canada, where foreign investors are charged an extra 25 per cent on top of the property purchase price, is one option being considered ahead of the June budget.

The federal government announced new rules in late 2023 that tripled taxes for foreigners who bought existing houses in Australia and a doubling in fees for those who left dwellings vacant.

About half a billion dollars in extra tax was expected to be raised under those changes.

AAP