A bill which will increase the surcharge for foreign investors purchasing residential properties in Tasmania has passed the lower house.
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The Duties Amendment Bill 2019 will increase the Foreign Investor Duty Surcharge from 7 per cent to 8 per cent, in line with Victoria and New South Wales.
The FIDS for primary production property will remain at 1.5 per cent as announced in the 2019-20 state budget.
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Treasurer Peter Gutwein said the government considered the rates to be fair, reasonable and consistent with surcharges in other jurisdictions.
"While the government welcomes foreign investment in Tasmania, it is important to ensure that foreign investors in Tasmania contribute their fair share and that the property market remains accessible to Tasmanians," Mr Gutwein said.
The increased surcharge rates will apply to transactions entered into on or after April 1, 2020.
Mr Gutwein said the bill amended provisions relating to the definition of a foreign person to ensure the only persons, companies and trusts that are genuinely foreign pay the surcharge.
"[An] amendment will provide retrospective relief from the surcharge to persons who become Australian citizens or permanent residents within six months of incurring the surcharge," he said.
Labor finance spokesman David O'Byrne said the bill needed to strike the right balance between ensuring fair taxes are levied on investors who are able to afford it and making sure foreign investors are not driven away.
"When we have bills such as this it's important to think through the consequences," Mr O'Byrne said.
Greens leader Cassy O'Connor said the state needed to keep an eye on foreign investors, describing Chinese interest in recent years as a "feeding frenzy".
"We regard this legislation as a sop to the concern over growing foreign ownership in Tasmania, and a pretty weak one at that," Ms O'Connor said.
"In the North-West region, more than 30 per cent [of agricultural land] is owned by foreign interests.
"It is a matter of public concern."