Property taxes for foreign buyers in the Australian state of Victoria are about to get a whole lot more expensive. Bloomberg reported that in order to cut the constantly increasing home prices in the region the government will more than double property taxes for foreigners.
The stamp duty surcharge will increase from three percent to seven percent and this change is scheduled to take effect on 1st July, Bloomberg reported state treasurer Tim Pallas as saying. Currently foreign buyers are exempted from paying other Australian taxes such as payroll and goods and services tax. The Victoria government also announced that it will increase the land surcharge on absentee owners to 1.5 percent from the current figure of 0.5 percent.
“It’s only fair that foreign buyers of residential real estate, who enjoy the capital growth as a result of Victoria’s livability and the amenity of our cities, contribute to the maintenance of government services and infrastructure,” Pallas noted in a statement.
Prices in Melbourne continue to skyrocket and data from research firm CoreLogic Inc. revealed that home values rose 9.8 percent during 2015. Prices in the city have been on the upswing for some time now with values rising 36 percent since 2012. Part of the reason for this jump is an increase in overseas buyers, including Chinese investors, who continue to put money into all sectors of the country’s real estate market.
Bloomberg reported that spending on Australian residential and commercial real estate from foreign investors totalled AUD24.3 billion last year and the country’s Foreign Investment Review Board noted that this figure has risen significantly since 2013.
“Overall we are seeing a strong story of Chinese investment into Australia’s broader economy which is in line with premium products, services and lifestyle-oriented themes,” Doug Ferguson, head of KPMG Australia’s Asia and International Markets, told the website.
Image via visitvictoria.com
