Australian Treasurer Scott Morrison's 2017 Budget focused on measures to cool the housing market and crack down on tax avoidance.
Morrison handed down the Budget on May 9. He said the the budget would return to a surplus in 2020-21 and remain in surplus over the medium term.
The Budget included a host of measures intended to tackle the issue of rising housing costs. "There are no silver bullets to making housing more affordable. But by adopting a comprehensive approach, by working together, by understanding the spectrum of housing needs, we can make a difference," Morrison said.
In particular, the Government will introduce a range of new rules for foreign investment in Australian housing. It will prevent foreign and temporary residents from claiming the main residence capital gains tax (CGT) exemption when they sell property in Australia, effective from Budget night. Foreign and temporary tax residents who hold property on Budget night can continue to claim the exemption until June 30, 2019.
The Government will increase the foreign resident capital gains tax withholding rate from 10 percent to 12.5 percent, and reduce the property price threshold for the regime from AUD2m (USD1.5m) to AUD750,000. The changes will apply from July 1, 2017.
Foreign owners of residential property will face an annual charge if the property is not occupied or available to rent for at least six months in each year. The annual vacancy charge will apply to foreign persons who make a foreign investment application for residential property from 19:30 AEST on Budget night. The charge will be equivalent to the foreign investment application fee which was paid at the time of application.
On the housing front, the Government will also:
The Budget contained the following tax integrity measures, under which the Government will:
The Budget also commits the Government to:
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