This article is from the Australian Property Journal archive
FOREIGN investment fees for the purchase of established home will be tripled under legislation introduced to federal Parliament by the Albanese government yesterday, while application fees for foreign investment in build-to-rent projects will be cut.
The Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2024, announced in the Mid-Year Economic and Fiscal Outlook, will aim to ensure foreign investment aligns with the government’s agenda to lift the nation’s supply of affordable housing, Minister for Housing Julie Collins and Treasurer Jim Chalmers said in a statement.
The legislation would also double vacancy fees for all foreign‑owned dwellings purchased since 9th May, 2017, which they said together means a six‑fold increase in vacancy fees for future purchases of established dwellings.
“Higher fees for the purchase of established homes and increased penalties for those that leave properties vacant will help ensure foreign investment in residential property is in our national interest,” they said.
Foreign nationals are generally barred from buying existing property, but can do so in 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.
“These changes further encourage foreign nationals to buy new property instead and help to ensure that those who do get approval follow the rules,” Collins and Chalmers said.
“The higher fees for established dwellings will encourage foreign buyers to invest in new housing developments. This will help create additional housing stock, jobs in the construction industry and support economic growth.”
Collins and Chalmers said the increased vacancy fees will encourage foreign investors to make their unused properties available to renters.
According to Domain, the national vacancy fell back to a historic low of 0.8% in January.
The federal and state and territory governments’ National Housing Accord is aiming to deliver 1.2 million “well-located homes” over five years from July, although analysts have suggested the target is farfetched. The federal government has also introduced the $10 billion Housing Australia Future Fund – which critics say doesn’t go far enough – and the accompanying $2 billion Social Housing Accelerator.
The federal government will also look at cut application fees for foreign investment in build-to-rent projects to encourage further development in nascent sector.
That follows its move last year to introduce tax breaks for build-to-rent developers, in the form of halving the withholding tax rate for eligible fund payments from managed investment trusts to foreign residents on income from newly constructed residential build-to-rent properties, from the beginning July this year, from 30% to 15%
