Additional Foreign Acquirer Duty Update

Legislation giving effect to the Queensland Government’s new 3% surcharge on foreign investment in residential property was rushed through the Parliament last Friday night.

The decision by the Treasurer to proceed with the legislation came despite direct representations from the Property Council  and some of Queensland’s largest developers outlining the significant impact the new tax will have on housing affordability and the local economy.

The new Additional Foreign Acquirer Duty (AFAD), which will come into effect on 1 October, not only captures foreign purchasers of houses and apartments but will also capture many Queensland-based businesses who generate a significant number of local employment opportunities and contribute to local housing stock.

Despite the Government’s narrative around this new duty, the Property Council has made it clear that this is not a tax on foreigners – this is a tax on Queenslanders.

The Treasurer has committed to work with the Property Council in the development of public rulings and guidelines for the AFAD’s implementation. The Property Council has been working to establish exactly what ‘carve-outs’ from the new duty may be achievable through public rulings and guidelines. However, given the number of flaws identified in these amendments to the Duties Act it is unlikely that all outstanding issues can be adequately addressed without legislative amendments.

As conversations progress, the Property Council will continue to provide updates on the implications for members. 

While remaining opposed to any taxes which discourage the flow of foreign investment into the property sector, the Property Council will work with the Government to minimise the impact of their new tax on our members.