Yesterday Prime Minister Tony Abbott and Treasurer Joe Hockey announced plans to add application fees to foreign buyers who are purchasing property in Australia. The application fee will be determined by the price of the property paid.
* Properties purchased under $1million dollars will incur a $5,000 fee
* Properties purchased over $1million will incur a $10,000 fee for every additional million dollars
The announcement has come off the back of a review into foreign investors illegally purchasing real estate in Australia both residential and agricultural. The government and real estate agencies alike are not concerned that it will effect investment by foreign parties, rather eliminate the ones that are doing the wrong thing. “The idea is not to deter foreign investment, the idea is to ensure that the rules are enforced.” Mr Abbott commented yesterday.
Economics Professor, Tim Harcourt from the University of New South Wales also agrees this proposed fee will not cause a change in investors when it comes to auction day. “The big players know what a great investment it is to live in Australia. They’ll see it (the fees) as nothing compared to the return they’ll get.”
It’s not just the real estate side of foreign investment that was under review. Mr Hockey also confirmed that foreign investment into Australian businesses will also be flagged for new application fees.
These new changes are all part of the Foreign Investment Board Review complying a more comprehensive database of foreign investment into Australia whether it be property or business and minimising applicants who are not investing for the right reasons.