Author: Matthew Marcarian
In a bid to capitalise on the strength of real estate prices, the NSW Government has followed other states including Victoria and Queensland by introducing a stamp duty surcharge of of 4% on the acquisition of all NSW residential land by foreign persons after 21 June 2016.
That means that foreigners acquiring real estate in New South Wales with a purchase price of AUD $1M will be approximately 8.5% in stamp duty.
A land tax surcharge of 0.75% will also apply to foreign owned New South Wales residential land. The land tax testing date is 31 December of each year.
Foreign persons do not include Australian citizens living abroad. CST Tax Advisors is able to assist international clients who have questions regarding these changes.
It will be interesting to see whether these changes along with tightening of lending policies of the Australian banks will result in any significant long term cooling of the residential property market in NSW. It may be that low interest rates and uncertainty in global financial markets will mean continued strength in property prices in New South Wales.
