Michelle Ciesielski, National Residential Director, Knight Frank Australia lists out all the new taxes and duties applicable to foreign purchasers buying in NSW, Victoria and Queensland.
Prior to the Victorian state government introducing statebased taxes in mid-2015, a foreign investor was not required to pay any additional costs to purchase an Australian residential property. One year on, foreign investors are now faced with Foreign Investment Review Board (FIRB) application fees to buy in Australia with surcharges on stamp duty and land tax across multiple states.
Despite these additional fees and duties, the Australian government continues to encourage foreign investment into new housing to increase the housing supply and support local economic activity.
There has been increased concern from foreign buyers in Australia with the announcement of the increase in fees and taxes, with many seeking clarity on the new regulations.
While these additional fees may deter some foreign investors, the majority of buyers investing in Australia are looking for longer term returns, such as the lifestyle, a place to accommodate family when studying and a transparent ownership structure. However, these latest announcements will certainly make Australia less competitive in the global marketplace.