Western Australia to raise tax on foreigners buying property

Foreigners buying WA real estate will be hit with a 7 per cent surcharge on the purchase price as the McGowan Government moved in last week's budget to almost double the tax.

Targeting overseas buyers, the State Budget included an increased rate from the 4 per cent surcharge which was announced in last year’s Budget.

The new rate of 7 per cent will be applied to foreign property buyers from January 1 next year, bring WA in line with other states which currently levy their surcharges at 7 per cent or 8 per cent..

It hopes to raise about $123 million between the 2018-19 and 2021-22 financial years.

On handing down the Budget, Treasurer Ben Wyatt noted the higher surcharge is not a new tax because it was a policy commitment made during the election campaign last year.

“Increasing the foreign buyers surcharge to 7 per cent will bring WA in line with other States, and provide the Government with additional revenue to help the State’s financial position,” Mr Wyatt said.

Last year the Government believed the charge to foreign buyers would bring revenue of about $21 million in its first year.

The charge will apply on the dutiable value of residential property purchased by foreigners and it will also capture corporations and trusts.

It will be applied on top of standard stamp duty payments.

NSW charges foreign buyers an 8 per cent surcharge, Victoria and South Australia charge 7 per cent, and Queensland 3 per cent.

The West Australian government is counting on the lithium boom to help it manage record state debt.