louie

Did a quick search and couldn't find anything.....

Seems there's a new land tax surcharge this year for NSW home/residential land owners classed as foreigners. Foreigners are more or less anyone other than Australian citizens (wherever they live) and permanent residents (or NZers with SCV) present in Australia for 200 days or more during the 2016 calendar year.

There's no exemption for a principal place of residence, nor does the usual land tax minimum threshold of $549k apply. So if you are a foreign person, you are up for 0.75% of the tax value of the land that you own in NSW.

You need to register as a foreign person by mid-March if you are already registered for regular land tax so presumably by the same date if you are not.

More here.

I own a tiny little flat (66m2), admittedly with a spectacular view and in Kirribilli, and if this applied to me it would cost me over $4.5k pa. Something to think about for temporary visa holders owning/buying property in NSW.

spouse of scouse

I think this is it Louie. I suppose it's retrospective? Hope all's well with you.
Land tax surcharge | Office of State Revenue

hahaahaa, sorry, just saw your link. I thought you meant you'd searched for a relevant article and couldn't find one..

Beoz

Cool. I wasn't aware of this. It looks retrospective too. Seems too little in my opinion. It should be more. It should also be added for local investors that have 2 or more investment properties.

The problem is too many investors are hoarding property which is not being recycled back into the system. Its a vicious cycle. It leads to no stock which is increasing prices, with increasing prices investors are unwilling to sell. With that lack of stock stamp duty collection is taking a hit.

On top of that all that increasing debt will amount to this.

http://www.news.com.au/finance/economy/australian-economy/australia-headed-for-economic-armageddon/news-story/998390d5128ed69e8799db3de9efe52d

xizzles

Oh drat. First Melbourne, now Sydney. This is gonna be painful, sigh.

Beoz

Why? Just sell. You've made a killing.

xizzles

Not an option I'm considering - property is a long term item in our portfolio and the ones we've bought are returning far better than the market average. I'm not in need of fresh capital (yet), and even if the bubble bursts, none of the houses are negatively geared or have any outstanding mortgages, so I'll just sit tight, pick up some good bargains and wait for the next cycle which will inevitably come because (a) people have short memories and don't learn from past mistakes, (b) as long as people keep breeding like rabbits, they'll always be in need of housing and (c) Sydney and Melbourne are what I'd call "too important (if not too big) to fail".

I'll just grin and bear it and cough up the 0.75% extra.

Beoz

..... and that's the exact reason why the need to make it 5%. To make you hoarders sell to keep the market moving.

xizzles

Mate, they can make it whatever % they deem appropriate - but you know what, they won't: because the people who make these decisions are similarly invested - either through their immediate families, intermediaries, relatives and/or holding companies et cetera.

If the bubble pops or the taxes get too high, they'll feel it too, and if there's one thing I've learnt from my many years in so many different countries is this: at the end of the day, politicians are only in it for one thing: themselves. They may mask, disguise, repackage, PR it any which way they choose, but I'll bet my bottom dollar that it won't be because they care about poor Joe Bloke who's been squeezed out of the market because the Chinese are buying up blocks of Glebe.... in cash.

Anyway, I'm not hoarding - I consider my properties a hedge against inflation and the rental a security for old age. It's good not having to rely on handouts and the State.

Beoz

Agree to a point but in NSW the decision makers have been making a lot of money in tax via stamp duty up until last year when the volume of property sales dropped dramatically. Sure they make money off the increases in property values but volume brings in more. And governments love selling the "look how good our books are" to the voters.

That along with the daily press about housing affordability and the new premier who promised to sort that there is only one option available in all this. Make investors sell. If I were you I'd keep an eye on this. It might be time for you to bow out.