A crackdown on foreign ownership in Sydney’s rental market is expected to force an increase in income limits on apartments.
Key points:The new FafsAs would also require foreign buyers to pay a 20% tax rate on the property’s valueForeign buyers could be forced to pay up to a 10% tax on their property’s incomeThe move could see foreign investors be barred from renting properties in SydneyFor more news, visit the News.net.au website or download the News app for your iPhone.
It is understood the Government has set a target of a 15% income limit on all new residential properties sold in NSW, with the new measures also targeting foreign investors and those leasing properties.
“Foreign buyers will be required to pay 20% on the value of the property and a 20 per cent tax on the income it generates,” a spokesperson for the Treasurer said.
“If the income of the owner is below the income limit then the owner will be liable to pay an additional 10 per cent on the total income of their home.”
The spokesperson said the measures were designed to “protect the affordability of our city and region”.
“These measures are being introduced to ensure the rental market remains affordable to families and communities in Sydney and surrounding areas,” they said.
Foreign investors are already exempt from paying the income tax on income earned from owning a home.
Foreign buyers are already allowed to rent property from the Federal Government.
The restrictions are part of a package of measures that will be put in place for new dwellings in Sydney.
They include a $4.3 million levy on the annual rental payments of new apartments in Sydney, the elimination of the rent-to-own option for apartments and the imposition of a 30 per cent cap on the rental value of properties.
Foreign investor’s interest in Sydney properties has risen since the global financial crisis.
Foreigner’s interest has increased since the financial crisisForeign investors in Sydney are already prohibited from buying property in the city.
The Federal Government says foreign investors are exempt from owning property in Sydney because of the financial and financial stability issues in the country.
Foreign investment has risen to an average of $9.8 billion annually since 2000, according to figures from the Reserve Bank of Australia.