Australia to raise fees for foreigners buying existing houses

SYDNEY – Australia will raise fees for foreigners who buy existing houses and will penalise them if they leave the properties vacant, while encouraging people from overseas to purchase new properties to boost

housing supply.

Foreign investment fees for the purchase of established homes will triple, Treasurer Jim Chalmers said in a statement on Dec 10 in Sydney.

Penalties for foreign buyers who subsequently leave their properties vacant will double, while application fees for investment in build-to-rent projects will be reduced, he said.

Foreigners are able to buy a home in Australia only if they live in the country to work or study, and are required to sell it if they do not become permanent residents. However, if they pay a fee equal to the initial application fee, they can keep the property vacant and unavailable for rent.

By adjusting both fees, the government will effectively require foreign owners to pay six times the existing amount to keep an established house vacant, and is betting that will boost supply in the rental market.

“We’ll also incentivise more rental properties coming onto the market by making it more expensive for people to leave them empty,” Mr Chalmers said. “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.”

The adjustments are also designed to encourage foreign investors to buy new housing developments.

The government will make sure foreign investment application fees for build-to-rent projects are at the lowest commercial level – no matter the kind of land involved – and will apply them from Dec 14, Mr Chalmers said. 

“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.” BLOOMBERG