Brexit and east-coast taxes on foreign investors tipped to benefit Perth property market

Brexit and east-coast taxes on foreign investors tipped to benefit Perth property market

THE Brexit result in the United Kingdom, coupled with the extra taxes that will hit foreign property buyers in New South Wales and Victoria, are set to attract more overseas money to Perth, according to leading real estate group Raine & Horne.

Raine & Horne Rockingham Beach principal Paul Curran said the UK’s decision to leave the European Union following the recent referendum will prove to be good news for WA property markets.

“The combination of a lower Australian dollar, property affordability and Perth’s proximity to Asia is already a plus for foreign investors,” Mr Curran said.

“The decision by the English to leave the EU has also created financial market instability, which will encourage more foreign investors to seek safer asset havens such as Western Australian real estate.”

Mr Curran said the Brexit vote followed hot on the heels of the decisions by the NSW and Victorian state governments to hike up stamp duty taxes on foreign buyers.

The NSW government has imposed a 4 per cent stamp duty surcharge on the purchase of residential property by foreign purchasers that commenced from Budget Day on June 21, as well as a 0.75 per cent land tax surcharge on residential land estate owned by foreign persons commencing in the 2017 land tax year.

As of July, Victoria has had a 7 per cent foreign investor surcharge on residential stamp duty and 1.5 per cent surcharge on some land tax.

Mr Curran said the new taxes would encourage foreign buyers to consider Perth property markets such as Rockingham Beach, where is it possible to secure property well below the median prices in Melbourne and Sydney.

In Perth, the median dwelling price is $506,000 according to CoreLogic RP Data, compared to $782,000 in Sydney and $590,000 in Melbourne.

In Rockingham, median house prices sit at $448,000 and $330,000 for apartments.

“It is early days for the Brexit decision and foreign buyers are just starting to absorb the longer-term ramifications of these additional taxes in the eastern states,” Mr Curran said.

“Excluding the new taxes and the Brexit result, we expect to see more foreign capital finding its way to Perth with our affordable real estate prices very popular with overseas buyers.”