Government gets it right on FIRB compliance but wrong on feesThe Federal Government has set a dangerous precedent and risks putting home ownership in Australia further out of reach with its decision on Saturday to proceed with excessively high fees on foreign investment in new housing.The Property Council of Australia said it welcomed the toughened compliance measures for those breaching foreign investment rules but that introducing overly high new fees on lawful investment at the same time would jeopardise housing affordability and has set a dangerous precedent for state governments to lift their taxes.”The Government’s stated objective is to improve housing affordability but it will achieve the exact opposite with these excessive new fees particularly if other states follow Victoria’s lead and lift their taxes,” Chief Executive Ken Morrison said.”We welcome the Government’s clamp down on illegal activity, which is long overdue.”However, the Government is undermining its own aim of making homes more affordable by simultaneously penalising legitimate foreign investment in new housing.”Foreign investment is underpinning Australia’s record levels of new housing construction, which is one of the few things propping up the economy.”We welcome the Government’s decision to lower proposed fees on greenfield development but are very disappointed it continues to want to overcharge for individual, commercial and off-the-plan purchases.”A smaller more moderate fee as recommended by the Parliamentary Committee would more than cover the FIRB approvals process and ensure taxpayers are not out of pocket, but the Government seems determined to use this process as an opportunity to revenue raise.”The federal debate has set a dangerous precedent with Victoria today announcing big increases in stamp duty and land tax for foreigners, a move which poses dire risks to housing supply and affordability in that state.”Foreign investment is driving a wave of new housing construction that benefits Australians by creating jobs and making housing more affordable, as this week’s FIRB Annual Report clearly shows.”Everyone – Government and industry alike – agrees that the key to improving housing affordability is to build more houses faster to take pressure of prices.”Investment from foreigners in new housing construction is allowing more houses to be built in Australia than ever before. “Last year was the first time in over a decade that we built enough homes to meet demand, and this was only possible because of increased levels of foreign investment.”We saw a 200 per cent jump in off-the-plan purchases in 2013/14. “What we have seen over recent years is that every newly constructed home that a foreign investor purchases enables up to four other homes to be built.”Australians can’t afford to see this supply pipeline dry up.”Media contact: Fiona Benson | M 0407 294 620 | Property Council of Australia
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