With fallout from changes to the foreign investment policy framework still sinking in, the Victorian state government is set to follow up with an announcement of its own. The treasury will introduce a new regime of taxation for those buying real estate. The impact of this decision is sure to be wide-reaching, and it’s certainly something to bear in mind when selling your own home.
The measure follows figures from the Foreign Investment Review Board Annual Report, which outlined that demand for Australian property has ballooned. The value of approvals increased $22.7 billion over the 2013-2014 financial year. Foreign investors have shown a growing taste for Victoria property in particular. According to a survey from National Australia Bank, foreign buyers accounted for around 20 per cent of all home sales in the March quarter 2015.
Echoing the national sentiment, there has been a growing concern in Victoria that these buyers have been making the market less affordable for local purchasers. Victorian Treasurer Tim Pallas said that offshore buyers should also give back in some way or form to the communities that they are buying into.
“If you own a property in the area then you should contribute accordingly, and these modest charges go some way to redressing that balance,” Mr Pallas said, according to a May 2 article published in The Age.
“It is inherently unfair on Victorians for foreign purchasers to take the gains of owning property in Victoria – through the services and infrastructure that Victorians pay for over an extended period of time – without contributing their fair share.”
From July 1, foreign nationals will need to pay an additional 3 per cent of the purchase price of a home, while the government will also introduce a surcharge of 0.5 per cent on land tax on new and existing properties from 2016 onwards.
Only time will tell what impact these changes will have on the Victorian property market, and it’s something vendors across the state will be keeping a close eye on. For help choosing a real estate agent for the sale of your home, contact Vendor Advocacy Australia today.