NSW unveils tax plan for foreign investors

Jun 2016 - News

NSW unveils tax plan for foreign investors 
The New South Wales government hopes to claim an additional $1 billion in revenue over the next four years after formally announcing its taxation plans for foreign property buyers.

It had been speculated that the NSW government were considering hitting foreign investors with a higher rate of land tax in the upcoming budget, but Treasurer Gladys Berejiklian has announced the tax increases will go further than that.

Berejiklian yesterday announced that from 21 June foreign buyers of residential real estate in NSW will face an additional stamp duty surcharge of 4%, while the start of the 2017 land tax year will bring 0.75% additional surcharge for foreign buyers.

The announcement means that NSW’s tax plan for foreign buyers will fall in the middle ground between that of Queensland and Victoria.

Victorian Treasurer Curtis Pitt has recently announced that foreign buyers will face a stamp duty surcharge of 7% and a land tax surcharge of 1.5%, while Queensland Treasurer Curtis Pitt last week announced a stamp duty surcharge of 3% for foreign buyers in his state.

Aussie house price growth falls down global rankings 
Despite house prices across the country recording near double-digit growth in the 12 months to March 2016, Australia has fallen out of the world’s top five locations for house price growth.

According to the latest edition of the Knight Frank’s Global House Price Index for the first quarter of 2016, house price growth in Australia was the sixth best in the world over the year to March at 8.7%.

While still an impressive rate of growth, that annual increase was not enough for Australia to keep the fourth place it had recorded in the previous edition of the index across the December 2015 quarter.

Michelle Ciesielski, Knight Frank’s Australian residential research director, house price growth in Australia has likely entered a more healthy point in the cycle.

“Overall growth in annual capital values has returned to more sustainable levels in 2016 – close to that experienced just over two years ago in the Australian mainstream housing market,” Ciesielski said.

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