Foreign purchasers of Victorian property will pay an additional 3% stamp duty from 1st July 2015, meaning that many will pay 8 to 9% stamp duty in total.
“This will have a devastating impact on the construction industry and greater Victorian economy” said Mandi Morison, National Franchisor of Jim’s Conveyancing “as the vast majority of properties sold to foreign buyers are new or off- the- plan.”
Typically property purchased off- the- plan in Victoria benefited from significant stamp duty savings. For example, a $500,000 apartment may only incur stamp duty of $3,000 rather than close to $25,000. From 1st July foreigners will pay the additional 3% stamp duty on the entire purchase price, meaning they would pay $18,000 stamp duty for the same purchase.
Many developers and property industry professionals rely on the sale of up to 50% of units to foreigners to ensure the success of their developments. This change will impact the speed that these developments can proceed and the consequences will filter down to construction workers and even potentially impact the value of the overall apartment market in Melbourne and Victoria.
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