ALBAWABA – Australia will impose a dramatic rise in fees on foreign buyers of existing homes who leave them empty, the government said Sunday as it tries to ease a rental crisis.
The centre-left Labor government said it would introduce new legislation next year to help alleviate tight supply that has made leasing houses very difficult, according to Agence France-Presse (AFP).
As supply dwindled, rental prices surged 7.6 percent nationally in the year to September 30, marking the sharpest increase in 14 years, official statistics showed.
Foreign investment charges for the purchase of established homes will triple, Treasurer Jim Chalmers said Sunday in Sydney, Bloomberg reported.
Penalties for foreign buyers who leave their properties vacant will double while application fees for investment in build-to-rent projects will be reduced, he said.
Right now, foreigners are only able to buy a home in Australia if they live in the country to work or study, and are required to sell if they don’t become permanent residents. However, if they pay a fee equal to the initial application fee, they can keep the property vacant and unavailable for rent.
Australia to triple fees on foreign-owned empty houses as rent surges (Photo by Saeed KHAN / AFP)
By adjusting both fees, the government will effectively require foreign owners to pay six times the current amount to keep a house vacant and is betting that will boost supply in the rental market.
"Higher fees for the purchase of established homes, increased penalties for those that leave properties vacant, and strengthened compliance activity will help ensure foreign investment in residential property is in our national interest," Chalmers said in a statement, as reported by Reuters.
The government in June pledged around $1.3 billion to deliver thousands of new affordable homes nationwide, with the aim of boosting public housing supply for Australians on waiting lists.
The changes announced on Sunday will generate around $300 million (A$500 million), which the government could invest in priority areas like housing.
The fee hike comes after Chalmers last year doubled the fees for foreign investors buying assets in the country, which the government said would generate A$455 million in extra revenue over four years.
