THE Property Council of Australia’s ACT Executive Director, Catherine Carter, says foreign investment can help us boost a sluggish ACT economy and help us build a better Canberra.

“Foreign investment underpins jobs, prosperity and stronger communities around Australia. The federal government’s proposed changes to foreign investment rules will drive up house prices, make it harder for first homebuyers, and ultimately hurt the ACT economy,” Catherine says.

“The federal government’s proposed changes to foreign investment rules would include fees of at least $5,000 per application to purchase levied on foreign buyers, along with tough new penalties.

“The property industry supports a modest registration fee to ensure the Foreign Investment Review Board can do its job and enforce the rules.

“However, the current proposal is essentially a federal government ‘stamp duty’ for foreign buyers. In the ACT, we’ve recognised that stamp duty is an inefficient tax – one which drives up house prices and adds a significant extra burden to first homebuyers.

“The current policy was designed to stimulate the construction of new housing, and support the building industry and its supply chain. Foreign investment provides a pre-commitment that enables projects get off the ground. Investors on mid-size developments now face another upfront cost that may send them to other markets.

“This new tax would have the perverse effect of making houses more expensive, and making it even harder for first homebuyers to enter the market.

“The solution is not to drive foreign investors away. The solution is to ensure our rules are enforced.

“The ACT economy currently faces many challenges – including public service cuts, rising unemployment, the highest office market vacancy rate on record, and residential approvals that have declined year-on-year despite national approvals rising.

“We must not forget that each new housing project in Canberra provides work for around 40 trades, sub-trades and para professionals – generating jobs and income for the federal and ACT government, and strengthening the Canberra economy,” Ms Carter concluded.