Fees for foreign investors who leave properties vacant will double and taxes will triple for those who buy existing houses
Australia is set to impose higher fees and increased penalties on foreign investors acquiring existing homes and leaving them vacant in a bid to address housing affordability. The federal government recently unveiled regulations that would triple taxes for non-residents purchasing existing houses and double fees for those keeping dwellings unoccupied. These changes are anticipated to generate approximately half a billion dollars in revenue.
The updated regulations also seek to incentivize foreign investors to channel their resources into new housing developments and prompt them to make their unused properties available for rental purposes, according to Treasurer Jim Chalmers. While acknowledging the existing stringent regulations, Chalmers emphasized the government’s commitment to further tightening them.
Foreign nationals are typically restricted from buying existing properties, except under specific circumstances such as employment or education. They are obligated to sell the property upon leaving the country if they haven’t obtained permanent residency.
Simultaneously, the government aims to encourage foreign investment in build-to-rent projects by reducing application fees to the lowest commercial level.
The change will standardise fees paid by foreigners investing in rental projects across different land zones.
Chalmers noted that vacancy fees, contributing around $5 million annually, have been underutilized, with only a limited number of breaches issued in the past year. He emphasized the positive impact of each additional property entering the rental market on the economy.
New South Wales Premier Chris Minns expressed optimism about the potential positive impact of the legislation, particularly in one of the world’s most expensive cities. He highlighted the need for changes to retain young residents in metropolitan Sydney, citing concerns about the current exodus.
The proposed regulations to implement these new fees are slated to be introduced into parliament in the coming year.
Source : The Guardioan 9 Dec 2023
