There have recently been a number of changes to stamp duty in Australia, with Queensland and New South Wales following Victoria’s lead and raising stamp duty for foreign investors (i.e. anyone not holding an Australian passport).
Here is a summary of what has changed, including the impact this will have on various price points:
Wider market implications
These changes bring Queensland and New South Wales more in line with– a measure which had minimal impact on the volume of foreign investment in Melbourne real estate.
- Even more investors are likely to begin looking beyond higher priced markets such as Sydney for better value, into Brisbane and Melbourne and even exploring opportunities in Adelaide and Perth where per square metre prices are significantly below those of Sydney.
- Transaction activity is likely to increase prior to the implementation dates.
- These new stamp duty changes are in fact likely to further limit the supply of new investment property, as developers are likely to shift more towards the owner-occupier market, which could further drive up prices in chronically undersupplied areas within the inner suburbs of Melbourne and key neighbourhoods in Brisbane. This is because many developers rely in part on FIRB buyers for their pre-sale requirements, thus any increase in stamp duty for foreign buyers may hurt developers’ abilities to hit pre-sale requirements and build.
- Those considering investing in Melbourne should take action before 1 July – As an example, those purchasing an averagely-priced available unit (AUD555,000) in , our current Melbourne development, would save AUD22,000 by investing and exchanging prior to the deadline (current 3% stamp duty tax would equate to a AUD16,500 charge, while after 1 July the 7% tax will increase this to AUD38,500)
- Brisbane investors should take action before 1 October – Those purchasing an averagely-priced available unit (AUD440,000) in our current Brisbane development, Stoneham, would save AUD13,200 by investing and exchanging prior to the deadline (after 1 October the 3% tax will increase this charge to AUD27,025)
- Longer term, we continue to focus our Australia investment strategy on