Victoria, NSW and QLD have all recently announced new surcharges and tax increases for foreign investors purchasing property; however according to Mark Mendel, CEO of iBuyNew these surcharges are excessive.
Mendel tells the Real Estate Conversation that the tax hikes flagged by the NSW, Victorian and Queensland governments could backfire if foreign investors take their business elsewhere.
“Foreigners buying property in Australia should be paying some tax, but the measures that have been announced by three state governments are over the top and could prove counter-productive for the domestic economy”.
The roll on effect from these excessive surcharges could mean that Australia will see fewer international students, slower population growth and a higher unemployment rate, which could be disastrous for the Australian economy.
NSW Treasurer Gladys Berejiklian has proposed foreign buyers purchasing residential property should be slugged with a 4 per cent stamp duty surcharge from next week, whilst they should also pay an extra 0.75 per cent land tax from 2017.
Queensland also recently announced that they would charge foreign investors a 3 per cent surcharge, while the Victorian government will increase its stamp duty surcharge from 3 per cent to 7 per cent and hike up the land tax surcharge for absentee owners from 0.5 per cent to 1.5 per cent.
Although foreign buyers in Victoria might not see much impact when buying off the plan property here, due to off the plan property attracting little stamp duty in VIC, foreign buyers in NSW and QLD will find property here in these two states.
Read the full article here, which is published in The Real Estate Conversation
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