The Victorian Government has passed legislation to increase the duty surcharge on purchasers of residential property by foreign persons to 7% for contracts entered into from 1 July 2016. The changes contain a number of other changes to the foreign purchaser duty regime. Those changes include:
- expanding the concept of residential property to property that is capable of being used primarily as residential property (eg even if it currently isn’t)
- expanding the concept of residential property to include short term accommodation (which includes a hotel, motel, serviced apartment, retirement village or student accommodation)
- expanding the concept of intending to construct a residential building to include intending to undertake land development (which can be triggered by merely applying for a permit, applying for rezoning or a plan of subdivision)
The changes also include an increase in the land tax surcharge for foreign absentee owners from 0∙5% to 1∙5%.
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