Foreign property buyers looking to purchase a property in Western Australia are to be hit with a 7 per cent surcharge from next January.
The Western Australian Treasury confirmed last week that they would raise the surcharge from 4 per cent to 7 per cent for all foreigners purchasing residential property from 1st January 2019.
The charge will apply on the dutiable value of residential property purchased by foreigners and it will also capture corporations and trusts.
It will be applied on top of standard stamp duty payments.
WA Treasurer, Ben Wyatt, said that the change from 4 per cent to 7 per cent will put an extra AUS$50 million into WA’s coffers over the next four years.
“It is something I think most West Australians would find fair and reasonable,” Wyatt said.
He added that the policy did not represent a breach of Labour’s pre-election pledge not to increase taxes, as the party had explicitly said that commitment applied only to West Australians.
However, the plan has been questioned by the Real Estate Institute of Western Australia.
The institute’s President, Hayden Groves said: “By adding another 3 per cent to 7 per cent, what it effectively will do is just disincentivise further any foreign investment in Western Australian property. “That’s a real pity because A) we don’t have a lot of it in the first place, and B) we need it to make sure projects get (off) the ground.”
New South Wales currently charges foreign buyers an 8 per cent surcharge, Victoria and South Australia charge 7 per cent, and Queensland 3 per cent.
Article published 14th May 2018