Stamp Duty & Land Tax surchages on Foreign buyers
The Victorian Government has introduced stamp duty and land tax surcharges for “Foreign Buyers”
The effect is that stamp duty on purchases of real estate in Victoria for a foreign buyer will incur an additional 7% stamp duty by way of example a “Foreign Buyer” will pay on a $1,000,000 purchase $55,000 (usual stamp duty) plus a further $70,000 being the surcharge.
As for land tax from 1/1/2017 a foreign owner will pay land tax at the rate of 1.5% instead of the usual 0.05% ie. A threefold increase.
If you own or buy a property in your family trust and you or your immediate family have any relatives (regardless of how remote, or whether you have had any contact with them) this will convert your family trust into a “foreign Buyer/Owner”.
It is imperative that you immediately amend your Family Trust Deed so as to specifically exclude any non Australian citizens as Beneficiaries of the Trust.
You need to have a qualified legal practitioner review your trust deed to ensure it is not deemed to be a foreign trust within the meaning of the stamp duty & Land tax act.
Call us now to discuss this further or click on the link below to the state revenue web site of victoria.