Victorian government milking foreign 'cash cow'

Foreign property investors being used as 'cash cows' by the Victorian government could potentially impact foreign investment in the state, according to property, finance and immigration firm Ausin Group (Ausin).

The comments came after the Victorian government announced it is set to impose a 3% levy on purchases by foreign citizens who are not permanent residents along with a 0.5% land tax surcharge to absentee property owners who are not citizens or permanent residents.

Joseph Zaja, the Ausin Group managing director believes the Victorian property industry is currently sustaining the state economy with stamp duty generating the highest tax revenue in the state.

"Overseas investors are an easy revenue raising target for the government," Mr Zaja said. 

“Foreign property investors are the lifeblood for several major property projects across Victoria.

"Without this cash injection many would not be developed and thousands of jobs would be lost. The State government is sending the message to foreign investors that it is not open for business by introducing new property taxes.

“Overseas buyers are about to be slugged with two new property taxes from both Federal and State governments – a double whammy."

The Federal government is currently considering introducing a $5,000 levy as part of its Foreign Investment Review Board changes for overseas buyers purchasing in Australia. 

Mr Zaja stressed Australia's enviable reputation as a place that welcomes foreign investment was key to future economic prosperity. 

“The Victorian government’s announcement to slug foreign property purchasers with a new tax is short sighted.

"It is hoped the other states don’t follow their lead.

"We expect our foreign purchasers to start looking for more investment opportunities in others states,” Mr Zaja said.

In the last financial year over 60 per cent of Ausin’s property sales totally almost 2000 were to foreigners buying property in Victoria. 

Over half of those sales were to investors seeking to move here in the near future.

Ausin is one of Australia’s largest privately owned companies providing property, immigration and financial services advice to both Australian and Asia Pacific markets. The company sells properties for Australian Stock Exchange (ASX) listed companies and private property developers in Australia and New Zealand.

It employs over 350 staff across its offices.