The state of South Australia is to introduce a 4% tax on residential property purchases by foreign buyers and temporary residents, joining a number of other Australian jurisdictions that have also recently introduced such a levy.
Such taxes, or stamp duties, are seen as a way of boosting government coffers while at the same time helping to cool the enthusiasm of foreign buyers, particularly from China and elsewhere in Asia, who have been seeing Australian homes as an asset class rather than a place to live.
The new tax was unveiled in the state’s annual budget last week, and will be brought to bear on transactions that take place on or after 1 January 2018, according to local media reports and an information page on the government’s website.
Other Australian states that have already introduced similar surcharges include Queensland, which has a 3% tax; Western Australia, 4%; Victoria, 7%; and New South Wales, 8%.
The national government has also got into the act, as reported here last month, with the introduction of a new, annual tax on foreign owners of “under-utilised residential property”, as part of an effort to ensure that more homes are available to the marketplace.
In a statement announcing that tax, the Australian Tax Office said it was focusing on those properties owned by foreigners which were “not occupied or genuinely available on the rental market for at least six months per year”.
It added that the charge would be equivalent to the relevant foreign investment application fee imposed on the property at the time it was acquired by the foreign investor, making it worth at least A$5,000 (US$3,700, £2,900).
The largest city in the state of South Australia is Adelaide. In addition to the new tax on residential property bought by foreigners and non-permanent residents, the state’s budget also features a new bank levy, which targets major banks and is said to be expected to raise A$370m over the next four years.
The government said the money raised would be used to fund “jobs initiatives”.