Foreign investors in Australian residential property are paying far more in stamp duty compared to local owners and investors, according to a new report from the Housing Industry Association (HIA).
The HIA said foreign purchasers of a median priced unit or apartment in Sydney ($747,000 as of the July quarter) were required to fork out $93,865 in stamp duty and other transaction taxes. This equates to more than three times the $29,105 which local owners and investors pay on an equivalent property, and added around one-eighth of the cost of the acquisition over and above the purchase price.
Non-residents in other states are also paying more in stamp duty and other transaction taxes.
Compared with the $26,870 and $12,145 in stamp duty paid by local buyers for average-priced units in Melbourne and Brisbane ($530,000 and $392,000 respectively), foreign buyers would be required to pay $68,970 and $28,905 on these same units respectively.
HIA’s latest report comes as cash-strapped governments around Australia rush to follow the lead set by Victoria in 2015 and raise money by levying stamp duty surcharges on foreign buyers, which are applied over and above any duties paid by regular investors.
In New South Wales and Queensland, surcharges equivalent to 8% and 3% of the purchase price have been applied since July 1, 2017 and October 1, 2016 respectively.
Moreover, foreign investors who want to purchase residential property in Australia have to pay $5,000 in application fees to the federal government for their application to purchase property to be processed.
Australian governments consider the heftier surcharges imposed on foreign investors to be a politically harmless means of raising much needed cash.