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.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.