New charges proposed for foreign investment

The  Property Council has made a submission in response to the Federal Government’s foreign investment ‘options paper’ released in late February, which outlined proposed fees for foreign investment in Australian real estate.

The options paper also sets out proposals for better data collection on foreign investment and increased penalties for breaches of the foreign investment rules.

The Property Council supports a properly regulated market and better data collection, however it argues that the proposed minimum fees of $00 are excessive, and well above what is required to fund these activities. At the level proposed the fees will have an effect on Australia’s housing market, in addition to the off-the-plan and financing costs for developers which will make the fees unworkable for industry.

Foreign investment puts downward pressure on house prices and helps bring on new housing construction, which increases the opportunities for Australians to get into the property market.

The Property Council supports the Government’s moves to bolster the monitoring and enforcement capabilities of FIRB and to properly enforce existing FIRB rules. It also strongly supports Government’s initiative to review and streamline the operation of the existing FIRB rules.

Critically, Government must target its compliance and enforcement activities to areas of investment concern and activities that are not in the national interest, and avoid jeopardising legitimate and vital investment areas.

Investment in new stock has increased housing supply in Australia to record levels, and for this fundamental reason should be encouraged.

The Property Council is urging Government to reconsider the obvious flaws in the policy and implement clear, facts-based policy that allows investment to continue to support record levels of housing construction activity.