Unfortunately, there is bad news for our foreign investors with the view to purchase a property in Queensland.
You will now be hit by a new three per cent transfer duty surcharge for foreign property investors, which is not a small amount.
This means if you now buy a property for $600,000, where stamp duty was formerly a little over $20,000, an additional three per cent will add an extra $18,000.
The Palaszczuk Labor Government introduced the tax on foreign purchases of houses and apartments in its budget legislation last October. The new transfer duty is anticipated to raise about $90 million over the next four years.
In Victoria, foreign property investors have also been whacked with massive increases in stamp and land tax from next year. Foreign buyers will have to pay seven per cent stamp duty, up from the current three per cent. While the land tax surcharge on “absentee landholders” will increase from 0.5 per cent to 1.5 per cent.
The NSW government is already ahead of the game, whacking a four per cent stamp duty surcharge on residential property purchases in its State Budget and a 0.75 per cent land tax surcharge from 2017.
In Queensland, the stamp duty doesn’t only apply if you live overseas and are buying here. You could be a foreign national who’s lived here for many years investing and still wear the extra levy.
The tax might scare you away if you are foreign investor looking to buy off-the-plan in South East Queensland.
If that is the case it will also have a massive impact on our economy. More than one in five buyers are foreign investors according to the NAB Quarterly Australian Residential Property Survey conducted in 2016.
Other estimates forecast foreign buyers make up to 15 to 20 per cent of buyers across Brisbane in the new apartment market.
The Gold Coast apartment market also relies on foreign investment levels and this could be a significantly negative impact on that market.
As an overseas investor you might consider what are the reasons behind the increased stamp duty?
One reason could be the direct result of the surge of Chinese investment in international property over recent years.
The Australian Government have pumped up Chinese property investments in 2014-15, bringing in $24 billion, double the previous year’s figure, which has certainly been welcomed by the majority of Australians.
It has certainly created some backlash in the international property market, with new taxes imposed in countries including Hong Kong and Singapore.
Dore more information visit: www.firb.gov.au