FOREIGN BUYERS FEEL THE SLUG

Foreign buying in Australia has slowed down as banks have reduced or stopped lending in this area the Federal Government has introduced new approval fees and enforced sales of non-authorised properties. Some State Governments have joined the cash grab and added tax surcharges for foreign buyers and absentee owners.

Since the increased enforcement of foreign investment rules in Australia in December 2015, which included a fee for foreign investors buying properties in Australia, the taxation department has raised more than $140 million from these fees. Foreign investors are generally prohibited from purchasing established dwellings and foreign governments require approval for any purchase.

Enforcement of the rules has resulted in the forced sale of 61 properties, not a great number considering the department would have approved around 25,000 purchases over two years or about 13% of the Australian market.

While Chinese (41%) represented the largest percentage of foreign buyers forced to sell the second largest group was from the United Kingdom (15%) followed by Malaysia, Canada, India and USA. The list of properties can be found on the Australian Government website at:  https://cdn.tspace.gov.au/uploads/sites/72/2017/02/MR006-2017-Divestment-list.pdf

Overseas purchases are expected to slow down as NSW and Queensland have introduced a 4% Stamp Duty surcharge and Victoria a 7% on foreign buyers, on top of this NSW and Victoria have added a surcharge on annual land tax for absentee owners (NSW 0.75% and Victoria 1.5%) reducing the return on investing in Australia.