The Australian government has announced rule changes for foreign investors looking to buy a home there. We look at what this could mean for Australian property plans.
Higher taxes for foreign investors
Foreign buyers are being encouraged to buy new build homes.
The federal government has announced higher taxes for foreign investors wanting to purchase an Australian established property. This is to address the tight pressure that both the housing and rental markets have been under this year.
However, the Australian government is keen for international buyers to invest in new developments. Guardian Australia reported treasurer Jim Chalmers saying, “Every extra house that is built in this economy, every extra property that goes on to the rental market is welcome”.
The new rules are as follows:
- A tripling of investment fees for the purchasing of established homes. This is meant to encourage foreign nationals to invest in new housing developments.
- A doubling of vacancy fees for all foreign-owned homes purchased since 9 May 2017 (which together means a six‑fold increase in vacancy fees for future purchases of established dwellings). This is intended to encourage foreign nationals to rent out their home, to ease pressure on the rental market. As example, if you were to purchase a $1.1m home as a foreign buyer, you’d have to pay a $56,400 fee for leaving the home vacant.
- The government will make sure foreign investment application fees for Build to Rent projects are at the lowest commercial level. This will be case no matter the type of land. This is in a bid to drive the creation of more housing stock, so that there are more homes for Australians. In addition, this will lead to more jobs in the construction industry and will improve economic growth.
- Moreover, it is important to note that if you move to Australia for work or study, then you can purchase an established property. However, as a foreign national, once you leave the country, you will be required to sell the property, unless you have become a permanent resident.
4 reasons to buy a new housing development
Buying a new build is the way forward for foreign investors in Australia.
1. Create your dream home. With a new housing development, you can often add your own personal touches. This could range from more in-built storage to an extra bedroom or a swimming pool.
2. High quality design. Plumbing that rumbles, lights that twitch, an awkwardly small room that isn’t quite big enough to have a function – these are the woes of older homes, not shiny new ones. While some prefer the aesthetic of older homes, new housing developments benefit from being made of high quality materials and a sleek and modern design.
3. Make the most of Australia’s rental market. Australia’s in-demand rental market means that there is a lot of profit to be made for landlords. According to Core Logic, rentals were up 8.3% nationally in 2023. In 2022, they were up 9.5%. Furthermore, the annual rise equates to $46 more per week based on the median rental value.
4. They’ve asked you to! While making a profit from renting you can simultaneously feel that you’ve done a good deed by easing Australia’s shortage of housing.
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