KIWIS buying property in Australia Australia is tightening up its tax rules for Foreign residential property owners. Property prices are a hot topic in Australia at the moment, (As they are in many other Countries) especially with claims being made that foreign investors are artificially boosting house prices.
They have introduced 3 new significant tax changes aimed at the Foreign Property Owner.…
1. There is draft legislation going through that seeks to introduce a 10% withholding tax deducted from the sale proceeds of certain Australian land sold by non – resident Australians after 1st July 2016.
This would apply to currently owned assets. Note that this is irrespective whether the property yields a capital loss or gain.
2. Under new proposals a foreign investor who wants to buy Australian property worth up to $1M would have to pay an additional levy of $5000 to the FIRB. For Investments over $1M there will be an additional levy of $10000 for every $1M thereafter.
3 From 1st July, new disclosure rules for foreign buyers of Agricultural land will be implemented.
Other Taxes for foreign buyers– VICTORIA
Victoria has implemented some additional State rules over and above the Federal taxes outlined above in an effort to stem the level of foreign buying. Its argues that the average Victorian is not on a level playing field.
Interestingly, whilst targeting the foreign buyer it acknowledges that in fact the ‘Baby boomers’ are responsible for a significant level of buying.These new taxes for Victoria DO NOT apply to New Zealand Citizens.
1. Foreign buyers will pay an additional land tax from 2016 of 0.5%. for new and existing properties purchased in Victoria.
2. In addition there will be increased stamp duty equivalent to 3% of the purchase price.