Government forges ahead with tripling fees for foreign investors
The Property Council of Australia (PCA) has warned that the fee increase could put the government’s housing targets “at risk”.
The federal government has passed new legislation under the Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2024 to triple fees for overseas investors purchasing established homes in Australia.
Foreign investors will also face a doubling of vacancy fees for dwellings purchased after 9 May 2024, resulting in a sixfold increase in vacancy fees for future purchases of existing dwellings.
At the same time, the federal government has decreased application fees for foreign investment in build-to-rent projects.
Housing Minister Julie Collins and Treasurer Jim Chalmers explained that “the higher fees for established dwellings will encourage foreign buyers to invest in new housing developments”, which will in turn “help create additional housing stock, jobs in the construction industry and support economic growth”.
In addition, the federal government passed the Treasury Laws Amendment (Foreign Investment) Bill 2024 which removes a loophole for investors from New Zealand, Finland, Germany, India, Japan, Norway, Switzerland and South Africa.
In February 2023, the NSW government’s revenue office had alerted the federal government that investors from these eight nations would not be subject to surcharge purchaser duty due to inconsistency with international tax treaties.
Under the new amendment passed this week, surcharge duty will now prevail for citizens of these eight nations.
The PCA stated that the amendments will “create further barriers to investment in the Australian property industry, putting at risk the government’s housing targets”.
The advocacy body stated that they “met with the Treasurer’s office, Commonwealth Treasury and the Opposition advocating to push the bill to a committee for an inquiry due to the limited consultation prior to its passing” but stated that their request was declined.
Minister Collins and Treasurer Chalmers stated that the amendments will “help boost Australia’s housing stock and provide more homes for Australians”.
“We will always put Australian interests first and this means ensuring Australians benefit from foreign investment in Australia.”
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