She was told to wait for a foreign investor tax review. She is not a foreign investor

She is 36 and has about $150,000 of usable equity in the Wollongong unit she bought seven years ago. She has a pre-approval that runs out in six weeks and a shortlist of three established houses under $620,000.

Last weekend she was ready to make an offer.

Then a headline landed: a state government has pledged to review its foreign investor property tax settings. Her broker read it and told her to hold off. Her brother told her the same thing. Wait and see what the review says.

She is a composite illustration, not a real person. The decision in front of her is very real, and plenty of people are facing it this week.

The question

"I am ready to buy. Now there is a review of foreign investor property taxes and everyone is telling me to wait until the rules are clear. I am a citizen buying with my own equity. Does this review even apply to me, and does waiting actually cost me anything?"

The answer: a pledge is a pledge

Start with what has actually happened, because it is less than the headline suggests.

A government has said it will review foreign investor property tax settings. That is the whole fact. No bill. No draft. No start date, no rate, no list of what is in scope. A review can recommend higher surcharges, lower surcharges, or no change at all, and governments routinely take months to respond to their own reviews.

So the first thing to say to her is simple. Nothing in the law has changed today. Anyone telling her the rules are about to change is guessing, and they are guessing about a policy aimed at a class of buyer she does not belong to.

Foreign investor surcharges are levied on foreign purchasers. She is a citizen buying with equity from her own home. If the surcharges rise, she does not pay them. If they fall, she gets no refund. On the facts available, the review's direct effect on her own purchase is nothing.

The cost of waiting has a dollar figure

Here is what waiting does to her.

Her pre-approval expires in six weeks. A new one means a fresh application, a fresh serviceability test, and whatever the lender's policy happens to be on that day.

Every month she does not own the property, she does not collect the rent on it. The houses on her shortlist are letting at roughly $550 a week. Six months of waiting is somewhere around $14,000 of rent that never arrives, on top of the growth she either gets or misses while she sits on the sidelines.

And the review has no end date. If she waits for certainty, she is waiting for something that may not arrive this year.

The indirect effect, honestly

Could a change to foreign investor tax settings move the market she is buying into? In principle, yes. Higher surcharges could reduce foreign demand in the segments foreign buyers favour. Lower surcharges could add some.

But notice what that effect depends on. It depends on the specific asset type and location foreign buyers actually purchase. Those segments are narrow: new apartments, particular developments, particular suburbs. An established three-bedroom house on an ordinary street, bought by a local investor with equity, sits a long way from that demand.

Two streets in the same suburb can be having completely different outcomes right now, before any review reports. That is the variable that moves her result. A policy pledge aimed at a different buyer class does not.

What this means for you

If you are holding a pre-approval and a shortlist, the review should not freeze you. It should make you ask one sharper question: if this policy changes in any direction, does it touch the asset I am buying?

For most domestic investors buying established property, the honest answer is no, or only at the margin.

The expensive mistake here is the one that shows up every time a policy headline appears. People defer a well-researched decision because of noise about a rule that does not apply to them. They lose the approval, lose the shortlist, and then buy something worse, later, in a hurry.

That sequence costs far more than any surcharge ever would.

The Ripehouse reframe

A tax review is a structure variable. You plan around it the way you plan around rates, vacancy and land tax thresholds: by knowing which of them actually touch your asset, and by how much.

What you can control is the asset and the street. Choose those with data rather than with a news alert.

Structure beats timing. The right asset on the right street, bought on the numbers, will outlast whatever this review eventually recommends, and whatever the next headline says after that.

Want to see how we test a purchase like hers street by street before a policy headline gets a vote? Join Jacob's free live webinar.