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Possible new rules for foreign property investors

(Transcript from World News Radio)

New foreign-investment rules could lead to civil penalties and fees being imposed on property investors who are not Australian citizens.

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As Sacha Payne reports, Prime Minister Tony Abbott says he wants to give Australian property buyers what he calls a “fair go.”

“There are millions of Australians who want to realise the dream of owning their own home. It’s not easy, but the job of government is to try to ensure that there are no unnecessary obstacles put in people’s way.”

Prime Minister Tony Abbott says new rules contained in a discussion paper on foreign investment would give prospective Australian property buyers an advantage.

Under the changes, foreign investors would pay a five-thousand-dollar application fee to buy a residential property under one million dollars.

For properties over one million, the fee rises to an extra $10,000 for every extra million in the purchase price.

Mr Abbott says he wants to encourage investment from overseas but it must not be at the expense of Australian buyers.

“It’s comparable to the system which has long operated in New Zealand, and it’s much more modest than the fees that operate in places like Hong Kong and Singapore, because, while we do want the rules to work, we also are open to foreign investment, and we welcome foreign investment, but it’s got to be foreign investment which is in our national interest.”

Non-resident foreign investors are currently banned from buying an existing home.

A temporary resident holding a visa of more than 12 months can purchase one existing home to live in while resident in Australia, but it must be sold when his or her visa expires.

Treasurer Joe Hockey says anyone found to be breaking the law would be fined and made to sell.

“There will be a new register set up so that we know how many foreign residential and agricultural property owners are in Australia, who they are … which is a very important form of reassurance to the Australian people. And if anyone does break the law, then we can fine them up to 25 per cent of the value of the property, as well as forcing them to sell the property. These integrity measures are absolutely essential for reassuring Australians that, when they go to an auction, they are on a level playing field.”

Mr Hockey says the extra $200 million raised through the new measures could help enforce rules around foreign ownership better.

He says investments are now more complex and the government needs more resources to scrutinise them.

“Transactions now are far more complicated. Money is coming from the four corners of the earth. We welcome that. But also it raises significant issues, ranging from national security to potential criminal activity, money-laundering and a range of other things. So our actual enforcement of the foreign-investment regime is costing far more — far more — than ever expected. Australians are paying for that. And what we are saying is, “Enough.” Those people who get the benefit of putting foreign investment into Australia should also pay for that service.”

The Government says it will make a final decision after March the 20th.

 

 

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