In a bid to appease voters on the sky-rocketing house prices, New South Wales doubled its property tax for foreign buyers to eight percent from four percent currently, reported Bloomberg.
With effect from 1 July, the higher surcharge comes on top of the normal New South Wales stamp duty, which can go as high as seven percent.
Aside from this, foreign homeowners will have to face higher annual land tax as the government increased it from 0.75 percent to two percent. New South Wales also abolished stamp duty concessions for investors acquiring off-the-plan properties, which prove popular among foreigners.
With the mining boom tailing off, New South Wales took over as Australia’s economic engine, with Sydney accounting for almost 25 percent of the country’s economic growth in 2016. The success, however, saw house prices in the city increase by 75 percent over the last five years – making it the second most expensive property market in the world.
Nonetheless, the pace of price growth slowed as some of the government’s lending restrictions started to bite. In fact, data from Corelogic showed that home prices in Australia dropped for the first time in 17 months last month.
“I want to ensure that owning a home is not out of reach for people in NSW,” said New South Wales premier Gladys Berejiklian.
With housing affordability as her top priority, Berejiklian also unveiled stamp duty concessions for first-time house buyers, higher investment in infrastructure and a shakeup of the planning system.
This article was edited by Denise Djong.
