Foreign investors to be slapped with huge penalties for leaving homes vacant
Foreign investors who leave their homes vacant will be slugged with a six-fold increase to penalties as the federal government seeks to free up more housing stock.
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TVTranscript
00:00 So, this goes to fees that are applied to foreign buyers buying homes in Australia.
00:06 There are already some pretty strict rules around how foreign buyers can buy property
00:11 in Australia.
00:12 They are largely barred from buying established homes and they have to have specific visas
00:18 as well, work or study visas.
00:19 You can't simply fly into Australia and buy a property as you like.
00:23 What's going to change here is the fees for foreign buyers with visas buying established
00:28 homes in particular.
00:29 That's where it's going to be most significantly hit.
00:32 There's a fee that's applied at the time of buying the property and there's also a fee
00:35 applied if that person decides to leave that property vacant.
00:39 And they're going to be going up quite dramatically.
00:41 Just as an example, if a person on one of those visas wanted to buy an established home
00:46 worth about $1.1 million, the fees to buy that home would go up from $28,000 to $84,000
00:54 under these changes.
00:55 And then if they kept that property vacant, the fees would go annually from $28,000 to
00:59 about $170,000 each and every year.
01:03 So a very significant impost there.
01:06 It is worth keeping one thing in mind though, and that is that foreign buyers make up a
01:10 fairly small slice of the Australian residential real estate market.
01:16 They're about less than 1% of transactions every year going to foreign buyers.
01:21 So this isn't going to have a dramatic impact we think on the property market overnight,
01:26 but it is going to raise some pretty significant revenue for the federal government.
01:30 The budget impact here is quite significant.
01:32 It's worth about half a billion dollars every year to the federal budget if the government
01:37 can get these changes through parliament sometime next year.
01:41 Here's the Treasurer Jim Chalmers speaking on this earlier.
01:44 By increasing the fees for people who leave them vacant off the rental market, then we
01:49 will raise money for the Commonwealth to invest in our housing agenda and other priorities.
01:55 And we will also incentivise the building of more new homes because the tripling of
02:00 fees applies to established homes.
02:02 And we'll also incentivise more rental properties coming onto the market by making it more expensive
02:08 for people to leave them empty.
02:11 That is a win-win for the housing market, but also for the budget.
02:14 It helps us raise money to invest in other priorities including in housing.
02:19 Miriam the opposition is a bit sceptical about these changes.
02:23 Some within the Coalition are arguing that foreign buyers, many will be fairly comfortable
02:27 in paying these increased fees.
02:30 It won't be that much of a deterrence to the Australian property market.
02:34 And they're suggesting perhaps foreign buyers should just be barred from the property market
02:38 altogether.
02:39 [BLANK_AUDIO]