Cash-strapped state governments, particularly Victoria which is attempting to manage a massive budget blow-out, are set to introduce new charges.
Taxes on windfall property gains of more than 62 per cent and new charges for using options when negotiating a settlement are among a battery of new revenue measures being imposed on the real estate market by cash-strapped state governments.while Victorians planning to buy an investment property or beach house will be liable for an annual land tax surcharge for the next decade.
For the vast bulk of properties valued at more than $300,000, or trusts with property valued over $250,000, there will be a $975 fixed surcharge and a tax increase of 0.10 per cent of the value of the landholdings. For example, an uplift of $250,000 should be subject to windfall gains tax of $93,750. For an increase of $450,000 the tax rises to $218,750, while the owner of a property rising in value by $750,000 will have to pay $375,000. Residential land smaller than two hectares and sale contracts before May 15, 2021, are exempted.
For example, a potential buyer pays $50,000 for an option to buy a $3.5 million property. Duty of about $750 is payable on the option. An additional $175,575 duty is payable on completion of the deal.
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