The State Government will introduce a Foreign Buyers Surcharge to pay for a freeze on TAFE fees and assist in the difficult task of Budget repair.
The surcharge will apply from January 1, 2019 at the rate of four per cent on all purchases of residential property in Western Australia by foreigners, including individuals, corporations and trusts. The surcharge is on top of the normal transfer duty payable on property purchases.
This change is restricted to residential property. It will not apply to purchases of commercial or industrial property, nor will it apply to residential developments of 10 or more properties, commercial residential property such as hotels, student accommodation and retirement villages, or mixed use properties that are used primarily for commercial purposes.
It is estimated that revenue of $21 million will be raised in its first full year (2019-20), and a total of $49 million over the forward estimates period to 2020-21.
This measure will bring WA into line with New South Wales, Victoria and Queensland, all of which currently apply a surcharge on foreign buyers, and South Australia, which will apply such a surcharge from January 1, 2018.
The four per cent rate is consistent with the rate to be applied in South Australia, and is lower than the rates applied in New South Wales and Victoria.
WA’s delayed introduction reflects the current softness in the State’s property market and will allow the market to adjust before being applied.
For more 2017-18 State Budget information, visit http://www.ourstatebudget.wa.gov.au