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Victoria hardest hit with stamp duty

A new report has revealed just how much foreign investors face in stamp duty costs to enter Australia’s property market, following increases by some state governments.

The latest edition of the Housing Industry Association’s Stamp Duty Watch report found that the purchase of a typical Melbourne unit by foreign a investor will incur almost $65,000 in stamp duty and fees.

“The situation is not much better in Sydney, with foreign investors hit for over $58,000 on the acquisition of a unit of average price,” HIA senior economist Shane Garrett said.

“Under the new rules, foreign investors in Brisbane units will be charged $29,000 in transaction taxes alone.”

As part of its state budget, the Victorian government recently increased its stamp duty tax for foreign buyers from 3 per cent to 7 per cent, while NSW introduced a 4 per cent stamp duty surcharge, and the Queensland government introduced a 3 per cent surcharge.

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The report also found that stamp duty is adding an estimated $91 per month to household mortgage repayments for a median-priced home.

According to the HIA, the typical stamp duty bill was $17,811 for a non-first home buyer owner-occupier in June 2016, “which added another 3.6 per cent to the cost of purchasing a home”.

“This means that stamp duty eats up almost four months’ worth of after-tax income,” the association said.

[Related: Foreign buyer tax 'playing on xenophobia']

 

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