Australia plans foreign investment fees

Photo: Claire L. Evans

Australia's property industry has been dogged by concerns for some time surrounding overseas investment, as some professionals argue that locals are being priced out of the market by speculative buyers from abroad.

Now, though, the government has announced proposals to introduce fees and stronger regulation for foreign investors.

The plans suggest an application fee for all foreign investments. For purchases of a home under $1m, $5,000 would apply, a charge that would rise to $10,000 for properties over $1m.

"While foreign investment is integral to Australia’s economy, it’s important to uphold the integrity of the framework and ensure that foreign investment is not contrary to our national interest," said Prime Minister Tony Abbott in a statement.

Non-resident foreign buyers are not permitted to buy existing homes, but temporary residents with visas of longer than a year can buy a home to live in while they reside in the country.

"Australia’s foreign investment policy for residential real estate is designed to increase Australia’s housing stock," said Abbott, but added that a "lack of compliance and enforcement of the rules over recent years is threatening the integrity of the framework".

"We need to make sure that all foreign investors are following the rules, and that those foreign investors who break the rules are not able to profit from breaking the law."