In an effort to boost Australia’s housing stock and provide more homes for Aussies, the Albanese government has announced higher foreign investment fees for housing.
“Higher fees for the purchase of established homes, increased penalties for those that leave properties vacant, and strengthened compliance activity will help ensure foreign investment in residential property is in our national interest,” Treasurer Jim Chalmers said in a statement.
At the same time, he announced the government will cut application fees for foreign investment in build-to-rent projects to support the delivery of more homes across Australia.
While the Treasurer assured that Australia welcomes foreign investment and the crucial role it plays a in “our nation’s economic success”, he said these adjustments are all about “making sure foreign investment aligns with the government’s agenda”.
The announced changes encompass a tripling of foreign investment fees for established home purchases, a doubling of vacancy fees for all foreign-owned dwellings acquired since 9 May 2017, resulting in a sixfold increase in future vacancy fees for established dwellings, and the augmentation of the Australian Taxation Office’s compliance regime to ensure foreign investors adhere to regulations, including mandatory residence sales when necessary.
“Foreign nationals are generally barred from buying existing property but can do so in very limited circumstances such as when they come to live here for work or study. When they leave the country, they are required to sell the property if they have not become a permanent resident,” the Treasurer said.
“These changes further encourage foreign nationals to buy new property instead and help to ensure that those who do get approval follow the rules.”
The idea behind the higher fees for established dwellings, he said, is to “encourage foreign buyers to invest in new housing developments”.
“This creates additional housing stock, jobs in the construction industry and supports economic growth.”
The government intends to introduce legislation next year to implement the new fees.
Elaborating on the announcement in media interviews on Monday (11 December), Mr Chalmers said: “We are working as hard as we can for Australia to get the right policy settings in place.
“We know we’ve got a long way to go, we know people are under pressure, we know the economy is slowing, but we’re making welcome and encouraging progress.”
Additionally, the Treasurer said the government’s plans regarding the standardisation of foreign investment application fees for build-to-rent projects at the lowest commercial level will eliminate the current disparity where investors may face higher fees based on the type of land involved, ultimately fostering consistency, predictability, and encouraging nationwide development of projects designed for long-term rental options for Australians.
All great ideas, but how possible will it be to implement, with so few builders left in the industry who have the capital to continue operating
on fixed price and fixed term building contracts? Australia needs 300,000 new homes each year for the next three years, to meet the current demands alone, not 30,000. With that number being needed now, and migration continuing at over 200,000 per year, I can’t believe this is a policy that is more than a token effort again to address our severe homelessness and cost-of-housing crisis. Let’s get real. Foreign investment in housing is not as big as people think. It can never solve our problems on its own. A Social Construction Fund, with Banks, insurers and super funds being required to invest in it, coupled with compulsory cheap land releases, and a low profit rent-to-own scheme for tenant/purchasers, where those profits go back to the Social Construction Fund to distribute to its big investors, would make more sense. Support that in the short term by bringing in cashed up builders from overseas if we have to, to achieve the target numbers.