Sydney 11 May 2015. The decision by the Victorian government to increase transfer duty and land tax payable by foreigners has been criticised by the Real Estate Institute of New South Wales.
Announced as part of the Victorian government’s budget released this week, from July 1, foreigners who are not permanent residents will be charged an additional 3 per cent surcharge on stamp duty when they buy property.
An additional 0.5 per cent land tax surcharge will also apply to absentee property owners who are not citizens or permanent residents from 2016.
REINSW President Malcolm Gunning said the Victorian government has made the wrong decision when it comes to increasing rates of transfer duty and land tax.
“In NSW foreign investment helps create jobs,” Mr Gunning said. “Construction is a big employer in NSW and around 47 per cent of new apartments are purchased by investors. This investment is providing much needed rental accommodation and property taxes are financing infrastructure.
“Sydney is a global city and we should not implement such changes here as we see proposed in Victoria. It would really hurt the economy because foreign investors would simply decide to invest somewhere else and we don’t want that to happen.
“Sydney is considered a major international city in the Asia Pacific Region. If you make the wrong decision, as evidenced in Canada, you call fall of the radar.
“We urge the NSW government not to consider similar proposals. As a state we may actually benefit from this increased taxation in Victoria as foreign investors will choose to put their money somewhere that is more welcoming and viable than our southern neighbours,” Mr Gunning said.