Page 1339 - Week 04 - Thursday, 12 April 2018
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ACT has not yet experienced the overheated conditions of the Sydney and Melbourne markets, it is clear that there is a rising demand for ACT property from foreign investors. This demand may push up house prices, to the detriment of local buyers.
States have introduced surcharges of both land tax and stamp duty. There is a risk that demand will shift to the ACT market unless we take similar measures. However, it would be a backward step to raise duty for foreign purchasers in the ACT when we have made significant progress to cut stamp duty rates under our taxation reform program. In contrast, land tax provides a relatively efficient means to address the influence of foreign investors by increasing the cost of continuing to own ACT property whilst offshore.
As I have indicated, the surcharge only applies to foreign non-residents. Australian citizens residing overseas are exempt, as are foreign citizens who reside in Canberra or elsewhere in Australia. Companies and trusts are not liable for the surcharge unless 50 per cent or more of a controlling interest in the company or trust is held by foreign entities, even if the company or trust is based in Australia. This will prevent foreign entities circumventing the intent of the law by interposing an Australian owner.
With the exception of nil and nominal rent arrangements, all land tax exemptions apply to the foreign ownership surcharge. This includes the exemption for construction of new dwellings, meaning that foreign developers will not be liable for an additional tax during construction. Tax reform is one of the levers by which the government can encourage the availability of housing in terms of both rental supply and housing for purchase.
The amendments made by this bill will encourage the supply of rental housing to the market for prospective renters and will ease the demand from the foreign sector, allowing local buyers to compete on better terms. I commend the bill to the Assembly.
Debate (on motion by Mr Coe) adjourned to the next sitting.
Planning, Building and Environment Legislation Amendment Bill 2018
Mr Gentleman, pursuant to notice, presented the bill, its explanatory statement and a Human Rights Act compatibility statement.
Title read by Clerk.
MR GENTLEMAN (Brindabella—Minister for Police and Emergency Services, Minister for the Environment and Heritage, Minister for Planning and Land Management and Minister for Urban Renewal) (10.41): I move:
That this bill be agreed to in principle.
I am pleased to present the Planning, Building and Environment Legislation Amendment Bill 2018, or PABELAB as it is known. The PABELAB is part of the government’s regular program of omnibus amendment bills that make minor policy
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