Second Australian State Hits Foreign Property Buyers - Report

Tom Burroughes

15 June 2016

The Australian state of New South Wales is imposing new burdens on foreigners looking to buy property to curb strong price growth, joining the state of Victoria in imposing such a tax, according to Bloomberg.

NSW intends to bring in a 4 per cent stamp duty surcharge from 21 June, and from next year it will bring in a 0.75 per cent land tax surcharge on foreign purchases, the report said.

The report, citing data from CoreLogic, said purchases by foreigners have helped Sydney’s median dwelling value almost double since the end of 2008.

Homebuyers in New South Wales now pay A$40,490 ($29,801) in stamp duty on a property worth more than A$1 million, plus 4.5 per cent of the value above A$1 million, the report, quoting government data, said. It noted that Hong Kong also brought in an additional 15 per cent tax on purchases by non-residents and companies in 2012 to curb demand from mainland China buyers; Singapore has also put up taxes on foreign buyers to 15 per cent from 10 per cent.

Further afield, countries such as the UK have imposed higher taxes on high-value property deals to try and curb hot property markets that have fuelled domestic political controversy about high prices.