Changing Legislation Affecting Foreign Property Buyers and Expat Aussies
This month, the REIV held an incredibly informative Buyer’s Agent Chapter Breakfast at the Kew Golf Club to focus on changing legislation affecting foreign property buyers and expat Aussies. 
Our wonderful speakers, Lily Ong of Lily Ong Business Lawyers and Migration Consultants, James Ye, Tax Director and Sherry Tank, Global Mobility Manager both of PWC Melbourne and Vikki Townsend of Bendigo Bank, Kew and Kew East filled the morning with detailed information on the ever-changing legal landscape of foreign real estate ownership.
Important to note that if you earn your income in foreign currency, it is now increasingly difficult to borrow to buy property in Australia.
Lily Ong informed us that:
From 1st July 2017, various stamp duty and land tax changes are affecting real estate investors and home owners in Victoria:
- Stamp Duty Surcharge for Foreign Purchasers
- First Home Owners Grant Changes for Regional Victoria
- Changes to the Off-The-Plan (OTP) Stamp Duty Concession
- Vacant Residential Land Tax
NSW, Qld and SA has also introduced similar surcharge duty on foreign purchasers of residential land (WA to follow suit) and NSW increased its surcharge rate on land tax to 8% on foreign owners
Foreign owners are required to notify when purchasing commercial but intention is to use land for residential use – liable to pay surcharge duty (at date of acquisition) e.g. buying warehouse but building 2 townhouses to live in.
For foreign purchasers, the stamp duty surcharge rate increased to 3% on1 July 2015. From 28 June, 2016 a further increase to 7% and the absentee owner land tax surcharge increased from 0.75% to 1.5%. Watch out for the coming Annual vacancy charge – Tell all purchasers to occupy or rent out!
Most discretionary trusts will be deemed foreign non-discretionary trusts (beneficiary taken to have a beneficial interest in the maximum percentage of property that may be distributed to a beneficiary in the general class stated in the Trust deed)
Check Trust deed and self-disclose or rectify (Sales affected from 1975 to current date]”
Also, foreign owners will pay a 1% surcharge on Land Tax going forward. This was implemented in the 2017-2018 budget.
For independent advice on buying or selling real estate, contact Janet Spencer at Buyer Solutions +61 3 9816 8555 or email jspencer@buyersolutions.com.au
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