The Western Australian Government has announced plans to increase the state’s Foreign Buyers Surcharge for residential property.
In September last year, the Western Australian Government announced a 4% foreign purchaser duty to be introduced on 1 January 2019.
However, in the State budget delivered last month, WA Treasurer Ben Wyatt announced that foreign investors of residential property in the state would in fact be subject to a surcharge of 7% as of 1 January 2019.
The Government says the measure will put Western Australia on par with New South Wales, Victoria, South Australia and Queensland which all impose a foreign purchaser duty – although the scope and rates vary from state to state.
The increased Foreign Buyers Surcharge is expected to raise an additional $50 million over the period to 2021 – 2022.
However, the surcharge has been deferred to January 2019, offering foreign investors a window of opportunity to secure Perth real estate before the new taxes come into effect.
The announcement follows increasingly positive signs for the Perth property market with many commentators, including Channel 7 Chairman and business magnate Kerry Stokes suggesting that now is the best time to buy.
Earlier this year, the Queensland Government announced it would be increasing their state’s ‘Foreign Acquirer Duty’ for foreign property investors from 3% to 7% from 1 July 2018.
This leaves Perth as the only city out of the 5 largest Australian cities without an additional duty for foreign investors of residential property – at least for the next 6 months.
If you would like more information about the new tax or about property investment in Perth and Western Australia please feel free to book a free appointment directly with your local Ironfish Strategist.
*This article was edited on 19 November 2018 to reflect new information released by the WA Government. Previously, it was assumed that FIRB duty would not be payable to purchasers in new developments of more than 10 lots. However, this has now changed.