The government of Victoria has introduced two new taxes that will be imposed on foreign investors buying real estate in the Australian state.

Victoria treasurer Tim Pallas declared that foreign investors buying real estate in the Victoria will have to pay a 3% tax on the purchase price starting from 1 July 2015. In addition to the 3% sales tax, foreign buyers will also be required to pay an absentee land tax of 0.5% from July 2016 if they do not occupy the homes they have purchased.

The implementation of the taxes is a move to deter foreign investors from land banking or property hoarding, especially since there have been concerns about unoccupied apartments in Sydney and Melbourne that are, and have been, marketed exclusively at Asian buyers.

Pallas says that the taxes, which are estimated to raise about $330 million in the next 4 years, are a fair way to ensure that the state’s infrastructure is maintained to keep up with population growth.