Victorian homes to become more expensive for foreign buyers

Overseas buyers will soon have to pay extra to purchase a home in the Australian state of Victoria under new rules announced yesterday.

Victorian treasurer Tim Pallas revealed yesterday that the surcharge applied to overseas property investors will be increased to 7 per cent in the upcoming Victorian budget, from the current level of 3 per cent. Non-foreign buyers will not have to pau an increased surcharge.

Recent figures from the National Australian Bank suggest that 10.7 per cent of all new homes in Victoria were bought by overseas purchasers in the first three months of this year. This figure had been far higher in the final three months of 2015 (16.4 per cent). Around 7.1 per cent of established homes are purchased by foreign buyers.

Pallas said that the new surcharge is being introduced to ensure that foreign property owners pay their fair share.

“It’s only fair really that foreign buyers of residential real estate, who enjoy the capital growth as a result of Victoria’s liveability, the amenity of our cities, contribute to the maintenance of government services and infrastructure,” he said.

“These charges effectively ensure foreign buyers who don’t pay taxes such as payroll tax and GST until they reside in our communities; fairly contribute to the development and maintenance of government service and infrastructure just like Victorian taxpayers do.”

Article by David Fuller