By Moustafa Daly
Australia’s federal government is considering leveling fines at foreign property owners who leave their properties vacant.
The fines could amount to up to AUD169,000 (approximately $111,000) and constitute a push by the government to address a housing crisis in the country. The fines could apply to properties purchased since 2017.
The measures follow a consistent rise in housing prices throughout 2023, with research finding that 90% of homebuyers in Australia can’t afford their first property purchase.
The move is seen as politically motivated.
“There is likely a political aspect to this, and the 1% or so of foreign-owned properties would include a lot of properties owned by students and other temporary visa holders (like employer-sponsored work visas),” explains James Hall, director at ANZ Migrate.
“I think the number of foreign-owned properties that are vacant are probably relatively low, and this is more likely political news using as a focal point to blame for housing issues,” Hall adds.
Would fines impact residency investors in Australia?
Though not directly aimed at them, the fines would impact any foreigner holding property in Australia, which includes investor visa holders.
“The investors [potentially impacted by fines] aren't investor migrants, but rather just any foreigner seeking to invest/buy property in Australia,” says Hall. “This would include people on temporary visas as well. The general rules are that a foreigner can buy new properties but not secondhand. This is designed to protect the larger re-sale property market from foreign influence.”
One popular route for investment migration in Australia is the Business Innovation and Investment Program (BIIP) Stream 188, which entails an investment between AUD 1.25 million ($828,000 approximately) and AUD 2.5 million ($1.65 million), in addition to passing a point-based evaluation.
This popular route is currently being reconsidered by the government after finding it doesn’t have an overall positive impact on the economy. Experts expect major modification to this route, or potentially scrapping it altogether, in the near future.
One of the largest nationality groups applying to this route are Chinese investors, who as Hall expects, could be an “unofficial” target of the new policy. “Although it might not be stated up front, [the announced fines] mainly concern Chinese buyers,” expects Hall.
Another route, albeit costlier, is the Significant Investor Stream, which is open for foreigners who invest at least AUD 5 million ($3.3 million), gaining access to permanent residency in the country.
The property fines in the context of Australia’s new migration strategy
On Dec. 11, Australia also made public its new migration strategy, which toughens restrictions to reduce immigration figures, which peaked at above half a million migrants last year, according to the government.
The migration strategy mostly impacts international students and graduates, who Hall says possibly constitute most foreign property owners.
“The government is talking about reducing immigration, and they need to prove themselves to the public after the opposition was in power for 9 years until last year, plus the added challenge of home ownership due to increasing prices,” says Hall.
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