FROM July 1, foreign investors in the ACT will pay an additional annual land tax surcharge of 0.75 per cent on the average unimproved value of their residential properties, says Chief Minister Andrew Barr. 

“The surcharge, which is included in the upcoming ACT Budget Review, is one of a suite of measures introduced by the ACT government to assist local home buyers,” he says.

“It also brings the ACT into alignment with New South Wales, which introduced a land tax surcharge for foreign investors in 2017. 

“The charge is estimated to raise around $4 million in additional revenue from 2018-19 to 2020-21.

“The charge will only apply to foreign investors. ACT and Australian residents will not pay the new charge, and neither will homeowners who live in their property.”

While Mr Barr believes these changes will benefit local buyers, Opposition Leader Alistair Coe says Mr Barr is strangling the property market and driving up rent.

He says Mr Barr has spent hundreds of thousands of dollars travelling overseas to attract foreign investment and now he is saying he doesn’t want foreign investment.

“His latest tax on investment in Canberra will hurt our housing market and economy,” he says. 

“The real issue in Canberra is the lack of land being made available for free-standing family homes.

“Instead of releasing land, he is going for a tax grab that will either drive up rent or devalue the purchases of owner occupiers.

“ACT Labor has demanded thousands of apartments be constructed and now he is trying to stop people from buying them. The foreigners who do buy them as an investment will now have to charge more for rent to recover the increased costs.”