The big news in property recently was the announcement by the federal government of their plans to charge fees to foreign nationals buying residential property in Australia and to crack down on those who break foreign investment laws.
Under the new scheme, foreign nationals buying residential properties will be charged $5,000 for properties valued under $1 million and an additional $10,000 for every additional $1 million, and the purchase will need to be approved by the Foreign Investment Review Board.
Anyone caught breaking or circumventing the rules will face a fine of up to 25 per cent of the value of the property and be forced to sell it.
It is expected that the charges will help raise about $200 million a year and help level the playing field for Australian property buyers, however it has been criticised by some as it could deter foreign investment and make it harder for some new developments to go ahead.
On the flipside though, Australian property is currently among the world’s most expensive, and with record low interest rates there are fears that it will continue to rise and local investors will be priced out of the market.
Sydney and Melbourne rank among the world’s six least affordable places to buy a home, according to US urban planning researcher Demographia and aren’t showing any signs of slowing down anytime soon.
Chinese investors made up the biggest source of foreign capital investment in real estate in 2013, making up nearly $6 billion of investment.
Prime Minister Tony Abbot said that he doesn’t want to deter foreign investment, but he does want to ensure the rules are enforced.
It will be interesting to see whether or not the new fees and fines will have an impact on the local property market. Hopefully for Australians it will help improve housing affordability.
What do you think? Are the new fees a good idea?
If you’re interested in buying property in the Bacchus Marsh area and would like to discuss any fees that might apply to your property purchase then feel free to get in touch with one of the team at Arbee Real Estate.