The Queensland government has announced plans to more than double the ‘Additional Foreign Acquirer Duty’ for foreign property investors from 3 to 7% from 1 July 2018.
The new tax increase is described as being part of a range of measures and ‘expenditure reprioritisations’ designed to raise revenue for the state.
The re-elected Palaszczuk government also plans to increase land tax by 2.5% on properties worth over $10 million.
The announcement has sparked concern from industry with Property Council Queensland Executive Director Chris Mountford stating:
“I think there’s a general lack of understanding that foreign buyers are a key ingredient to getting new housing construction starts going.
“If we’re making it harder for those people to invest in Queensland, ultimately that’s going to flow through to lower levels of activity,” he said.
Details on the changes are yet to be confirmed. If implemented, it will leave Perth as the only city out of the 5 major Australian cities without an additional duty for foreign investors. However, this will increase to 4% from 1 January 2019 (but won’t be applicable when buying in a residential development of 10 or more dwellings).
The current duty payable by foreign investors in the other major cities/states are: