Foreigners snapping up WA real estate will be hit with a 7 per cent surcharge on the purchase price as the McGowan Government moves to almost double a previous plan to target overseas buyers. Today’s State Budget will include an increased rate from the 4 per cent surcharge announced in last year’s Budget.

The new rate of 7 per cent will be applied to foreign property buyers from January 1 next year and hopes to raise about $123 million between the 2018-19 and 2021-22 financial years.

In handing down the Budget, Treasurer Ben Wyatt will argue that the higher surcharge is not a new tax because it was a policy commitment made during the election campaign last year.

“Increasing the foreign buyers surcharge to 7 per cent will bring WA in line with other States, and provide the Government with additional revenue to help the State’s financial position,” Mr Wyatt said.

He said it was “fair” for foreign owners of WA real estate to pay a surcharge because they benefited from services and infrastructure. Last year, when the Government first announced the surcharge, it believed the charge to foreign buyers would bring revenue of about $21 million in its first year.

Camera Icon All eyes will be on WA Treasurer Ben Wyatt today as he hands down the State Budget. Credit: Daniel Wilkins

The Budget revelation caused concern among the WA real estate industry, fearful that foreign buyers might be turned off the local market.

But Mr Wyatt said an evaluation of the surcharge in other States convinced him the impact on WA would be minimal.

The charge will apply on the dutiable value of residential property purchased by foreigners and it will also capture corporations and trusts.

It will be applied on top of standard stamp duty payments.

NSW charges foreign buyers an 8 per cent surcharge, Victoria and South Australia charge 7 per cent, and Queensland 3 per cent.