Fees for foreign owners leaving homes vacant will skyrocket next year as the federal government attempts to free up the nation’s housing supply for Aussies.
Announced by the government on Sunday, the changes will make it harder for foreign nationals to buy existing homes, instead encouraging them to invest in a new pipeline of projects that could be rented affordably.
Under this new policy, fees for the purchases of established homes will be tripled, and homeowners would see a steep penalty for leaving properties vacant – doubled for all foreign owners who have bought a property since 9 May 2017.
According to this year’s figures from the Australian Bureau of Statistics, there are 136,000 of these ‘ghost homes’ dotted around the country. However, data from the Australian Taxation Office shows that foreign investors own only 1339 established homes in 2021-22, a small fraction of the more than half a million properties sold annually in Australia.
Treasurer Jim Chalmers said the adjustments are intended to align foreign investments with the government’s agenda to boost the nation’s supply of affordable housing.
“We welcome foreign investment because it plays a crucial role in our nation’s economic success,” he said in a statement provided to Build-it.
“These changes further encourage foreign nationals to buy new property instead and help to ensure that those who do get approval follow the rules.”
Foreign nationals are widely barred from buying existing property and are only allowed to 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.
The federal government would also cut application fees for foreign investment in “build to rent” projects to encourage the construction of more homes, Chalmers said.
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,” said Chalmers.
Chalmers also told reporters the changes are set to generate around A$500 million, which the government could invest in priority areas like housing.
The fee hike comes one year after Chalmers doubled the fees for foreign investors buying assets in the country, which the government said would generate $455 million in extra revenue over four years.
The application of commercial foreign investment fees to all future Build to Rent projects will apply after 14 December 2023.
