Today, the first day of a new financial year, introduces a raft of property tax changes around Australia.
According to the Property Council of Australia here’s what’s different:
- A new withholding regime applies to foreign resident vendors. For property transactions of $2 million-plus, purchaser must withhold 10% of price unless vendor shows a clearance certificate from the ATO.
- FIRB application fees will be indexed for C.P.I.
- Foreign buyers of residential property pay additional stamp duty of 4% on transactions from 21 June, 2016.
- Separate 0.75% land tax surcharge on residential real estate owned by foreigners starts in 2017 land tax year (January).
- Foreign investors no longer entitled to 12-month deferral for the payment of stamp duty for off-the-plan purchases of residential property.
- Foreigners lose tax-free threshold for land tax surcharge.
- Mortgage duty abolished.
- Duty on the transfer of business assets or a declaration of trust over “business assets” (other than land) will be abolished from July 1, 2016.
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- Foreign buyers will pay 7% additional stamp duty on residential property, up from 3%. Read this for more information: A bad day for foreign buyers
- The government has increased the variable rate for the Fire Services Property Levy (FSPL) on industrial property by 11% and commercial property by 6%. The variable rate for the FSPL on vacant land will rise 240%.
- First Home Buyers Grant to increase from $15,000 to $20,000.
- Foreign investor changes do not come into effect until October 1.
- Stamp duty concessions of up to $15,500 apply for eligible purchases of off-the-plan apartments (effective from June 20, 2016).
- Stamp duty removed from land or asset transfers as part of business reconstruction.
- Land Tax: Fixed component will rise by $100 and land tax calculation for multi-unit dwellings will be based on total AUV value of the land rather than individual AUV of the unit.
- Commercial rates: Average increase of 7% in 2016-17 with a fixed charge of $2235.
- Commercial stamp duty: Reductions from 1.8% to 1.48% for transactions up to $200,000; between 3% and 2.5% for $200,00 to $300,000; and reductions from 5.17% to 5.09% above $1.455 million.
- Fire and Emergency Services Levy: A valuation-based charge will apply for commercial properties with progressive marginal rating factors applied to the average of the 2014, 2015, and 2016 AUV values.
- General Insurance Duty: To be abolished.
- First home buyers will receive a 50% stamp duty discount for established homes valued up to $450,000 and capped at $10,000 thereafter. This actually commenced on May 24th 2016 and will continue until June 30th 2017.
- There are no changes planned