Angus Raine says withholding laws and property taxes attracts foreign investors to SEQ

Angus Raine says withholding laws and property taxes attracts foreign investors to SEQ
Angus Raine says withholding laws and property taxes attracts foreign investors to SEQ

New withholding rules no the sale of property by foreign residents, coupled with additional real estate taxes in NSW and Victoria will attract more foreign money to South East Queensland according to Angus Raine, executive chairman of Raine & Horne.

The new withholding rules apply to property contracts of $2 million or more that are entered into on, or after 1 July 2016. Where the purchase value is $2 million or more from a foreign resident seller, a 10 percent withholding will be incurred at settlement. The withheld amount is credited against any capital gains or income tax payable by the seller on the sale.

He said these new withholding rules come into play at a time when the NSW and Victorian governments are hiking up the stamp duty impost for foreign buyers as well as imposing increased land tax charges.

Raine & Horne Surfers Paradise Clarke Brackenridge, said that the new withholding rules will encourage foreign buyers to consider property markets such as the Gold Coast longer-term where it’s possible to secure quality real estate, which is priced well below the withholding threshold.

“It is early days for this new ruling, and foreign buyers are just starting to absorb the longer-term ramifications of this additional red tape,” he said. 

“Notwithstanding the new withholding requirements, we are already seeing more foreign money starting to find its way to the Gold Coast, with new stock very popular with overseas buyers.

“At the same time, with a median apartment price in Surfers of $345,000 and yields above 5 percent, this is much better value than you’ll get Sydney or Melbourne – so it makes sense that with or without the new withholding laws, overseas buyers are starting to take the Gold Coast market seriously.”

Raine & Horne Chermside principal Kim McHardy said the introduction of the withholding regulations for foreign vendors will help us attract more overseas buyers longer-term, particularly when you can secure new apartments for about $450,000, which are producing yields of 4-5 percent

“Other features that will tick the boxes for foreign buyers include a growing pool of new apartment stock in Chermside, excellent proximity to the CBD and Brisbane Airport, exceptional public transport, along with a magnificent upgrade of the local Westfield shopping centre that will make it the biggest in Australia,” he said.

Tags: 
Stamp Duty Foreign Investment

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