Foreign investor interest in Australian property remains strong, according to HLB Mann Judd, despite high tax rates.
Josh Chye, partner at HLB Mann Judd Melbourne, said Australia was seeing strong demand from investors in Singapore, Hong Kong and Malaysia, while those in China had reduced.
This supported the real estate market despite rising interest rates and inflation fears.
Chye said: “New demand from mainland Chinese investors has declined significantly, but other parts of the Asia-Pacific region, including Singapore and Hong Kong, are still strong and Australia remains an attractive jurisdiction despite falling rates. relatively high taxation.
However, rising prices and tax increases could make Australia less attractive in the future as investors turn to Europe or the United States.
“We have higher than average tax costs for foreign buyers of real estate than our global neighbors, including on property tax. This has steadily increased over the past seven to 10 years at the state level and at the federal level, and the additional tax is a burden on foreign investors in real estate.
“While high tax rates are a consideration for many overseas buyers, this is offset by Australia remaining a stable jurisdiction for property investors. Price growth, particularly in Sydney and Melbourne, has also attracted interest from foreign buyers.
“[But] if there continues to be a trend of continued tax increases or the removal of tax breaks solely aimed at overseas investors, it will undoubtedly damage Australia’s reputation and position as a stable jurisdiction for overseas investors Australia and other markets such as the US, Canada and the UK will increasingly appear attractive as an alternative destination for property investment.