Foreign Buyers Surcharge exemptions to support regional development

Published Friday, 16 September, 2016 at 12:51 PM

Treasurer, Minister for Aboriginal and Torres Strait Islander Partnerships and Minister for Sport
The Honourable Curtis Pitt

Following consultation with the property sector, Treasurer Curtis Pitt has proposed that ex gratia relief be provided to overseas developers from the Government’s new 3 per cent foreign acquirer duty.   

Mr Pitt said careful consideration had been given to all stakeholder suggestions and a number of changes have been made to the first draft of the guidelines. 

“We are introducing the 3 per cent Foreign Buyers Surcharge to ensure foreign purchasers of residential property, who benefit from government services and infrastructure, make a contribution to their delivery – as local buyers do,” Mr Pitt said. 

“Prior to the policy taking effect on October 1 we have engaged extensively with industry and taken on board expert feedback to ensure our guidelines strike the right balance between provision of targeted relief, simplicity and certainty of administration. 

“Following these consultations, we will be providing a specific exemption for projects that receive ‘significant development’ status. 

“To pass this test the development by a foreign entity must include a minimum of 50 residential lots. 

“We have also included an amendment allowing for ex gratia exemptions in regional areas where a major project may not strictly meet the ‘significant development’ status threshold but can demonstrate that it would deliver significant economic benefits in the region where it’s proposed to occur. 

“The regional significance test is targeted at non-metropolitan areas and is not intended to apply to urban in-fill developments. 

“We will also give weighted consideration to foreign companies with a head office in Australia, a significant staff presence here or when foreign companies primarily contract for Australian services and materials through Australian contractors. 

“The more of these factors a company can meet, the stronger the likelihood of them establishing that they are Australian-based. 

“I’d like to thank the Property Council and its members for their constructive contributions both in person and through written submissions, which have assisted in developing these revised guidelines.” 

Queensland executive director of the Property Council of Australia Chris Mountford welcomed the amendments. 

“The Treasurer has been true to his word and has engaged with industry stakeholders to work through detailed matters regarding the operation and application of the tax,” Mr Mountford said. 

“He has consulted in detail and taken a great deal of feedback on board from industry. 

“It has been well-publicised that the Property Council does not support an additional tax on foreign investment on residential property in Queensland, or anywhere in Australia for that matter. 

“This remains our firm view, however the Treasurer has taken steps to ensure that developers providing much needed housing and jobs across Queensland will be provided relief from the tax. “ 

The Palaszczuk Government will accept comments on the adjustments in this version by email by through to Tuesday 20 September 2016. 

This timeframe is to ensure that the Guidelines can be in place for 1 October 2016.  

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