Purchasing a property in sydney? Be prepared to pay a 4 per cent duty surchage. The rule was put in place on 21 June and will apply to all home purchases in New South Wales, making the state the second in the Country to impose stamp duties on foreign buyers. On top of that,there will also be a 0.75 percent land tax surcharge from next year on.
In Melbourne, Victoria, the existing 3 per cent stamp duty will be raised to 7 per cent starting 1st of July this year. Mainland Chinese buyers made up bulk of the foreign buying population, and property prices have doubled in Sydney and risen 60 percent in Victoria since 2009. Current property taxes stand at A$40,490 for an A$1 million property with additional 4.5 percent surcharge for properties priced above the million dollar mark.
In the bid to rein in the rather wild increase in home prices and preventing locals from be in priced out of the race, the larger Australian banks have already clamped down on home loans. These property curbs are likely to affect only those looking to reap short term benefits as they will further eat into diminishing yields which currently stand at an all-time low of to 4 percent.
Considering other Asian cities such as Hong Kong and Singapore are already charging at least 15 percent tax on foreigner property buyers, this recent moves may not deter real investors who have their eyes set further on long-term goals.