In response to the overheated real estate market and the shortage of housing, the Australian government recently made major adjustments to the Foreign Investment Review Board (FIRB) fee system, especially the application fees and vacancy tax for purchasing "second-hand buildings". The purpose is to curb the overheating of foreign investment in the Australian real estate market and encourage investment in new residential projects to increase housing supply.
Overseas buyers mustPay 3 times the fee
From April 9, 2024, the Australian government has significantly increased the FIRB application fees for foreign investors planning to purchase "established residential properties", also known as "second-hand properties". For example, for the purchase of residential properties worth A$1 million to A$2 million, the FIRB application fee will increase from $28,200 (approximately HK$140,000) on July 1 last year to $84,600 (approximately HK$420,000), a sharp increase of three times. This will undoubtedly increase the investment costs of foreign investors in the Australian second-hand housing market.
| property prices | Second-hand property application fee | Application fees for vacant homes and new homes |
| Less than 750,000 | $12,900 | $4,300 |
| Less than 1 million | $44,100 | $14,700 |
| Less than 2 million | $88,500 | $29,500 |
| Less than 3 million | $177,000 | $59,000 |
| Less than 4 million | $265,500 | $88,500 |
| Less than 5 million | $354,000 | $118,000 |
| Less than 6 million | $442,500 | $147,500 |
| Less than 7 million | $531,000 | $177,000 |
| Less than 8 million | $619,500 | $206,500 |
| Less than 9 million | $708,000 | $236,000 |
| Less than 10 million | $796,500 | $265,500 |
| More than 10 million | $3,514,800 | $1,171,600 |
| Property price range | July 1, 2023 Until April 8, 2024 | April 9, 2024 Until June 30, 2024 Completed residential buildings | April 9, 2024 to June 30, 2024 New or nearly new homes and vacant land |
|---|---|---|---|
| Less than $75,000 | $4,200 | $12,600 | $4,200 |
| $1 million or less | $14,100 | $42,300 | $14,100 |
| $2 million or less | $28,200 | $84,600 | $28,200 |
| $3 million or less | $56,400 | $169,200 | $56,400 |
| $4 million or less | $84,600 | $253,800 | $84,600 |
| $5 million or less | $112,800 | $338,400 | $112,800 |
Vacancy taxes have also doubled to encourage buyers to rent out their homes
The Australian government has also adjusted its vacancy tax system, increasing the vacancy tax to double the original foreign investment application fee for properties that are unoccupied or rented out for more than 183 days (six months) in a vacancy year. This measure is intended to encourage foreign investors to put their properties on the rental market to alleviate housing shortages.
Overseas buyers are advised to purchase new buildings or buy land to build houses
However, the Australian government is maintaining the existing application fees for new or nearly new residential properties and vacant land. For example, from April 9 to June 30, 2024, the FIRB application fee for the purchase of a new residential property or vacant land valued at less than AUD 1 million will be only AUD 14,100. This policy will undoubtedly attract foreign investment to new housing projects, thereby boosting housing supply.
Through these adjustments, the Australian government has clarified the dual objectives of its real estate policy: on the one hand, by increasing the investment cost of existing homes, it will curb excessive foreign investment in the existing housing market; on the other hand, by reducing the fiscal burden of new housing investment, it will encourage an increase in housing supply. With the implementation of these policies, it is expected to have a profound impact on the Australian real estate market in terms of improving housing supply and stabilizing housing prices.
Chinese