Australian government policy on overseas investment and immigration in 2015 has been frequent, with an emergency halt to the $5 million major investment in immigration! From December, all foreign buyers will pay a $5,000 processing fee thereby applying to buy an Australian home! Foreign buyers who break the rules will face tougher penalties and could even be jailed for up to three years under new rules proposed to be introduced by parliament next spring!
Now Victoria (VIC) has added an extra stamp duty for overseas investors. In the words of Victorian Treasurer Tim Pallas, foreigners should do their "bit" for the urban areas they live in
The?latest?policy
1) VIC will levy an additional 3% stamp duty (from July 1, 2015 onwards).
2) An additional 0.5% land tax will be levied in Victoria (from 2016).
3) A $5000 AUD application fee will be charged to cover FIRB (Foreign Investment Review Board) expenses.
4) Increased penalties for non-compliant operators to $127,500 fine or 3 years imprisonment; $637,500 fine possible for companies purchasing property in violation of the law.
5) The Act does not apply to New Zealand residents or Australian permanent residents.
This means that an overseas investor buying a property in Melbourne, the capital of Victoria, at an average price of $645,000 will have to pay an extra $19,350 in stamp duty. At the current exchange rate, it will be nearly 100,000 RMB more!
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Additionally, according to THE?AGE, on September 4, Victorian Planning Minister Richard Wynne suddenly announced changes to Melbourne's CBD building laws, which will limit the height and density of CBD buildings, due to concerns about an "avalanche" of skyscraper applications. Richard Wynne issued the new building code without prior notice to the property development industry, and the temporary new rules have now come into effect, applying to all building development applications submitted after Sept. 4, with only certain key developments exempted.
Developers and the real estate industry have expressed strong displeasure with the Victorian government's sudden changes to Melbourne's CBD building laws last week. That's because the new laws have the potential to significantly reduce the height of future towers in the CBD, with new applications for developments submitted after Sept. 4 limited to a maximum of 24 storeys.
The main point is that the plot ratio (the ratio of gross floor area to building site area) in Melbourne's city center has been set at 24:1, which means that a new building with a site area of 1,000sqm must not have a gross floor area of more than 24,000sqm.