Update on rules for foreign investment in residential real estate 

The Residential Development Council has been vigilant on limiting taxes on foreign investment which includes the end purchasers and the relevant Australian based corporations.

At the Federal level there has been a carve out through the rules governing Annual Programs, which has ensured our members are not required to pay an additional 1% charge on land purchases. There are still issues around the “off the plan” program for the sale of apartments, however RDC are one of just four (and the only residential/property reference point) to review a further options paper and provide input to ensure our residual issues are dealt with.

In terms of the Victorian 3% surcharge and 0.5% land tax, the Property Council and the Urban Development Institute of Australia have secured a major win for home buyers by successfully negotiating exemptions from the Government’s new international investor charges.  

Official new guidelines have been published which outline how the new taxes will apply in Victoria. They have been developed with input from the Property Council and detail the scope of exemptions available to property businesses.

The Victorian Government’s Economy and Infrastructure Committee is also undertaking an inquiry into the legislation which introduced the increases charges for the purchase and holding of Victorian property by international investors. The Property Council will be presenting evidence to the inquiry, and the final report is expected to be released around 23 June.

Following the Victorian Government’s move, in late May the Queensland Government ruled out any new taxes or charges on foreign investment. The RDC has welcomed this news, and our focus is now on ensuring NSW and SA commit to similar policies to rule out any new fees, taxes or charges for foreign investors in those states.