The latest measures planned by Australia to tackle its housing crisis are poised to have a significant impact on the property market, with a special focus on foreign investors. These new regulations, which apply to existing dwellings purchased after May 2017, are designed to boost housing availability and alleviate the rental shortage throughout the country.
For foreign investors, these changes mean facing considerably higher costs. Buying an existing property worth $1.1 million now comes with an application fee of $84,600. More notably, if such a property is left vacant, the investor will incur an annual vacancy fee of $169,200. This policy is designed to discourage the practice of leaving investment properties unoccupied, a factor contributing to the housing scarcity.
Moreover, the policy includes a significant increase in foreign investment fees for the acquisition of established homes. These fees have been tripled, alongside a doubling of vacancy fees for all foreign-owned dwellings purchased since 9 May 2017. As a result, the vacancy fees for future purchases of established dwellings have effectively sextupled.
Foreign non-residents interested in the Australian residential property market are required to obtain foreign investment approval before making a purchase. The fees for this approval vary, ranging from $5,000 to $90,000, depending on the property’s value. This fee structure is part of the broader initiative to regulate foreign investment in the housing sector.
The overarching aim of these policy changes, spearheaded by Treasurer Jim Chalmers, is to combat the rental housing shortage. These steep charges exceeding $169,000 on vacant foreign-owned properties are part of a concerted effort to make more homes available for Australians. With these measures, the government is taking a firm stance against the trend of foreign investors buying properties and leaving them unoccupied, thus exacerbating the housing crisis. This policy change is a clear indication of Australia’s commitment to prioritizing the housing needs of its residents over foreign investment interests.
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Australia implements robust measures targeting its #housingcrisis, intensifying costs for foreign investors with higher fees & substantial penalties for leaving properties vacant, prioritising local housing needs. 🏡🌐💰🛑🤲 #TheIndianSunhttps://t.co/dHh20mNFTz
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