Australia Raises Fees for Foreigners Buying Properties

Australia has announced that it will increase fees for foreigners buying existing houses and impose penalties if they leave the properties vacant. At the same time, the government is encouraging overseas buyers to purchase new properties in order to boost housing supply.

Tripling Fees for Purchasing Established Homes

Treasurer Jim Chalmers stated on December 10 that foreign investment fees for buying established homes will be tripled. This move aims to discourage foreign buyers from purchasing existing properties and instead incentivize them to invest in new housing developments.

Doubling Penalties for Leaving Properties Vacant

In addition to increasing fees, the government will double penalties for foreign buyers who leave their properties vacant. This measure is intended to encourage foreign owners to rent out their properties, thereby increasing the housing supply in the rental market.

Reduced Application Fees for Build-to-Rent Projects

To further encourage foreign investment, the government will reduce application fees for investment in build-to-rent projects. This initiative aims to make it more attractive for foreign buyers to invest in new housing developments rather than purchasing existing properties.

Restrictions on Foreign Ownership

Foreigners are currently only allowed to buy a home in Australia if they live in the country for work or study. If they do not become permanent residents, they are required to sell the property. However, by paying a fee equal to the initial application fee, foreign owners can keep the property vacant and unavailable for rent.

Increasing Costs to Boost Rental Market

With the adjustments to fees and penalties, the government is effectively requiring foreign owners to pay six times the current amount to keep an established house vacant. This move is expected to drive more supply into the rental market and address the housing shortage.

“We’ll also incentivise more rental properties coming onto the market by making it more expensive for people to leave them empty,” said Treasurer Jim Chalmers. “That is a win-win for the housing market, but also for the budget. It helps us raise money to invest in other priorities, including in housing.”

Encouraging Foreign Investment in New Developments

The government is also focused on encouraging foreign investors to buy new housing developments. To achieve this, it will ensure that foreign investment application fees for build-to-rent projects are set at the lowest commercial level, regardless of the type of land involved.

“We welcome foreign investment because it plays a crucial role in our nation’s economic success,” said Treasurer Jim Chalmers. “These adjustments are all about making sure foreign investment aligns with the government’s agenda to lift the nation’s supply of affordable housing.”

In conclusion, Australia is increasing fees for foreigners buying existing properties while imposing penalties for leaving properties vacant. Simultaneously, the government is reducing application fees for investment in new housing developments. These measures aim to boost the housing supply and ensure that foreign investment aligns with the country’s affordable housing agenda.