Or risk paying hefty levies on it. The ‘it’ here refers to private residential properties in Australia left empty for more than 6 months.
Despite rising property prices, there are many high-end residential development in major Australian cities such as Sydney and Melbourne left empty. An example of how much these properties cost – a 3-bedroom apartment in Melbourne’s Docklands cost almost US$1 million (S$1.4 million). Most of these properties were purchased by Chinese investors.
Mainland Chinese buyers made up 25% and 16% of new housing supply in New South Wales and Victoria respectively. There has been dissatisfaction amongst citizens as even the middle-classes are finding themselves priced out of the property market. Cases of homelessness have also been rising.
In response, some states have implemented higher taxes on properties left empty for more than 6 months. This is in addition to the nationwide tax imposed in May with a minimum of A$5,500 (S$5,900) for properties value above A$1 million. Come next January, Melbourne will have a tax of 1% on an empty home’s value.
But will these taxes stop wealthy Chinese buyers from parking their cash in Australia or in other global cities such as Vancouver, London, Toronto and Dublin for example? Although the Chinese government has recently began to stash capital outside of China, to many investors this is merely another cost to take into account.