The Federal Government will triple foreign investment fees for the purchase of established homes and double ‘ghost house’ fees for foreign-owned dwellings in a bid to boost Australia’s housing stock.
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 the national interest.
At the same time, the government will cut application fees for foreign investment in Build-to-Rent projects to support the delivery of more homes across Australia.
Federal Treasurer Jim Chalmers said the changes were about easing the housing crisis.
“We welcome foreign investment because it plays a crucial role in our nation’s economic success,” he said.
“These adjustments are all about making sure foreign investment aligns with the government’s agenda to lift the nation’s supply of affordable housing.”
The changes will see invest fees for the purchase of existing homes triple, while the vacancy fees for all foreign-owned homes purchased since 9 May 2017 will be doubled.
The Australian Taxation Office’s compliance regime will also be enhanced to ensure foreign investors comply with the rules.
This will include selling their residence when required.
“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,” Mr Chalmers said.
“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.”
Minister for Housing, Julie Collins said higher fees for established dwellings would encourage foreign buyers to invest in new housing.
“This creates additional housing stock, jobs in the construction industry and supports economic growth,” she said.
“The increased vacancy fees will encourage foreign investors to make their unused properties available to renters.”
The government will introduce the legislation needed to implement the new fees next year.
Ms Collins said the government would also make sure the lowest foreign investment application fees apply to Build-to-Rent projects, irrespective of the type of land involved.
Currently, Build-to-Rent investors can be subject to different, higher fees if their projects involve particular kinds of land, like residential land.
“Lowering the fees for these investments will help to ensure our foreign investment framework is consistent and predictable for all Build-to-Rent investors, and encourage the development of these projects right across the country that are specifically designed, built and managed to provide long‑term rental options for Australians,” Ms Collins said.
The application of commercial foreign investment fees to all future Build-to Rent-projects will apply after 14 December 2023.