New Victorian foreigners tax the straw to break the camel's back: Ian James

Melbourne buyers agent Ian James expects the Victorian state government foreign nationals stamp duty tax "may well be the straw that breaks the camel’s back."

Noting the vast majority of foreign nationals buying investment properties are buying apartments off the plan, Ian James says for the most part a foreign national purchaser buys in Melbourne because their kids are going to school here or they are waiting to get permanent residency and further to that, citizenship.

"These are the people who will be your future neighbours, your children’s friends at the local school," Mr James said.

"We need to increase our population as quickly as possible and whilst the Government looks for more ways to waste our money, I think there are better ways to collect it."

He said the foreign national investors who buy land and develop townhouses, villas or homes to live in create jobs here in Australia.

"The foreign nationals spend money to build homes, and furnish them spending money locally in shops.

"A local buyer can purchase an older home, rent it out for several years until the land appreciates enough to get a further loan to build or redevelop the land.

"This means, no extra work for builders, no cabinet makers or furniture manufacturers."

But the JPP Buyer Advocates founder says many of the off the plan properties being sold to them are "overpriced by usually 20%+ and are very difficult to lease out.

"They are quite often inner city or on the fringe in Docklands and Southbank.

"Foreigners hold them for 3-5 years and then they sometimes sell them at a break-even or even a loss.

"The Victorian state government wants to stop foreign nationals buying in Victoria by increasing the stamp duty they must pay.

"This new 3% tax may well be the straw that breaks the camel’s back.

"And for all those high rise developments in the pipeline – good luck!!!," he recently blogged at JPP Buyer Advocates.