Dec 9, 2023
Australia Will Raise Fees for Foreigners Buying Existing Houses
, Bloomberg News
(Bloomberg) -- Australia will raise fees for foreigners who buy existing houses and will penalize them if they leave the properties vacant, while encouraging people from overseas to purchase new properties to boost housing supply.
Foreign investment charges for the purchase of established homes will triple, Treasurer Jim Chalmers said Sunday in Sydney. Penalties for buyers from overseas who leave their properties vacant will double while application fees for investment in build-to-rent projects will be reduced, he said.
Foreigners are only able to buy a home in Australia if they live in the country to work or study, and are required to sell if they don’t 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.
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“We’ll also incentivize more rental properties coming onto the market by making it more expensive for people to leave them empty,” 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 into 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, Chalmers said.
“We welcome foreign investment because it plays a crucial role in our nation’s economic success,” Chalmers 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.”
(Updates with Treasurer’s comments in fifth paragraph)
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