Australia’s New Housing Strategy: Higher Taxes for Foreign Buyers to Address Shortage - Property Inc

Australia’s New Housing Strategy: Higher Taxes for Foreign Buyers to Address Shortage

In a bold move to tackle the housing shortage, the Australian government has announced significant changes in its policies regarding foreign investors in the real estate sector. According to SBS News and Brooke Cooper’s reports, the government will impose increased fees and penalties on foreign buyers, specifically targeting those purchasing existing homes and leaving them vacant.

SBS News outlined that the federal government’s new regulations involve tripling taxes for foreigners buying existing houses and doubling fees for unoccupied dwellings. This initiative aims to address Australia’s critical rental vacancy issue, which hit a record low of 1.02% in October. Treasurer Jim Chalmers, as quoted by SBS News, emphasized, “It’s about boosting housing stock and getting more homes onto the rental market.” The strategy is expected to generate approximately half a billion dollars and increase rental availability.

Brooke Cooper’s article further delves into the specifics of these measures. The government is set to triple foreign investment fees on established homes and double vacancy fees for properties acquired after mid-2017 and left unoccupied for over half a year. Moreover, from Thursday onwards, application fees for built-to-rent projects will be significantly reduced.

However, industry experts express concerns over these measures. Mike Zorbas from the Property Council of Australia and Tim Reardon from the Housing Industry Association warn that such policies could discourage global investment and have a minimal impact on housing supply. Simon Pressley from Propertyology echoed this sentiment, critiquing the government’s focus on revenue generation rather than addressing core housing issues.

The government’s approach, which includes bolstering the Australian Taxation Office’s capacity to oversee these regulations, signifies a substantial shift in addressing the housing crisis. While it aims to make homes more accessible to Australians and increase the rental stock, the long-term effects of this policy, particularly on foreign investment in Australian real estate, remain to be seen.

References:

https://www.sbs.com.au/news/article/foreign-buyers-to-be-taxed-more-in-effort-to-address-housing-shortage/8nmi42dks

https://www.yourinvestmentpropertymag.com.au/news/higher-penalties-for-foreign-investors 

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