|Stricter Enforcement Regime Planned for Non-resident Buyers of Australian Homes|
The Australian government is to introduce stricter enforcement of the rules controlling non-residents' purchases of residential property.
It has for some time been illegal for non-resident foreign persons to buy 'established' dwellings in Australia as investment properties or as holiday homes. They are however allowed to buy new-build dwellings and vacant residential land for development. Also, temporary residents can apply for permission to buy one established dwelling to occupy while they are in Australia, but they have to sell it when they leave. This regime is intended to preserve the existing housing stock for permanent residents, while still allowing foreign investment in the construction sector.
However, a report from the federal parliament's Economics Committee has found that the rules are being circumvented by some foreign investors. It has made several recommendations to improve compliance, all of which the government has accepted in whole or in part:
The Australian Taxation Office (ATO) is to take over responsibility for enforcing the residential property ownership rules.
Moreover, starting 1 December this year, all prospective foreign buyers will have to pay application fees. These fees will be collected by the ATO, and will also apply to business, agriculture and commercial property applications as well as residential property.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Aug.25, 2015