The Property Council of Australia has welcomed the introduction of legislation to lower foreign investment application fees for build-to-rent projects as a move that will boost investment in new rental supply.
Property Council of Australia Group Executive Policy and Advocacy Matthew Kandelaars said the Federal Government reducing foreign investment application fees for build-to-rent projects to the lowest appropriate commercial level was the right move.
“Build-to-rent housing plays a vital role in the national housing landscape, offering tenants long-term tenure security, enhanced amenity and professionally managed properties,” Mr Kandelaars said.
“Build-to-rent has the potential to deliver 150,000 new rental homes in the next 10 years, but the settings must be right.
“In a competitive global capital market, promoting foreign investment into much-needed new housing makes sense.
“International capital, including Australian superannuation funds, is backing build-to-rent housing projects abroad as we speak.
“We need to redirect this capital to support the construction of new Australian homes.
“The nation won’t reach its 1.2 million homes target by 2029 without global investment.
“Legislation, like that introduced today, is an important step to direct that investment in new homes,” he said.
Investors in build-to-rent properties can currently be subject to varying and higher fees based on the type of land involved, such as residential land.
For example, in a $50 million residential deal, fees amount to around $1.1 million, compared to $13,200 for a commercial deal.
Mr Kandelaars said this has hindered foreign investors in build-to-rent developments classified as residential.
The Federal Government has also introduced legislation to triple the foreign investment fees for the purchase of established homes and double the vacancy fees for all foreign‑owned dwellings purchased after 9 May 2017.
“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,” Federal Treasurer Jim Chalmers said.
“The Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2024 is about making sure foreign investment aligns with the Government’s agenda to lift the nation’s supply of affordable housing.”
Mr Chalmers said currently foreign nationals were generally barred from buying existing property, but could 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.
“These changes further encourage foreign nationals to buy new property instead and help to ensure that those who do get approval follow the rules,” he 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.
“The increased vacancy fees will encourage foreign investors to make their unused properties available to renters.”