Hello to my international friends and partners with FIRB clients,
With the Victorian State Budget and the Federal Budget due next week there has been a lot of talk about foreign investment and real estate.
Unfortunately, it seems as though with both the Federal and the Victorian Governments struggling to balance their budgets they are going for a cash grab in this area. See the info for more info and below for an overview of what is being proposed.
- $5,000 FIRB fee for all properties under $1,000,000
- $10,000 FIRB fee for properties over $1,000,000
- $10,000 FIRB fee for each additional million
Victorian State Government (we are yet to hear from the other states)
- 3% tax additional to stamp duty
- We are not sure how this works for off the plan property, confirmed with an accountant it is on dutiable value (land value) as per stamp duty.
- It is on dutiable value it will not be too significant. Average dutiable value on Cuspac’s projects are around $200,000 – so a $6,000 fee.
The property industry is lobbying strongly against these taxes. Cuspac Property Group is a Member of the Real Estate Institute of Victoria and we joint together with a group of real estates master agents strongly recommended against a large fee. The Federal Fee of $5,000 is above what we part of the group advsied, which was $2,000-$3,000.
Worse, the State Government has not taken any advice from key stakeholders and don’t understand the impact it will have.
Thought I should keep you all in the loop.
For Investors and Salesperson : any contracts entered into before 1 July 2015 will not include this increase. This is a great motivator for your clients to get in prior to that date.