The government of Australia announced a substantial increase in fees for foreign buyers of existing homes who leave them empty, to alleviate a rental issue.
The centre-left Labor government said it would present new legislation next year to assist in alleviating the scarcity of rental housing, which has left many renters scrambling for a place to live.
Rental costs rose 7.6 percent countrywide in the year to September 30, the highest increase in 14 years, according to official statistics.
Treasurer Jim Chalmers stated, “There are too many properties empty around Australia”.
“There are not enough homes available to Australians who desperately need them”, Chalmers continued.
According to a government statement, the rules are intended to encourage foreigners to invest in new housing developments rather than existing stock.
Foreigners are already prohibited from buying established properties in Australia unless they are here for employment or study, and they are normally compelled to sell the residences when they depart.
Foreigners now pay a foreign investment charge that fluctuates based on the home price, such as Aus$28,200 (US$18,500) for a median-priced Sydney home worth slightly more than Aus$1 million.
The cost for foreign owners of ‘ghost’ residences will be treble under the new program.
Furthermore, foreign owners of established residences that have been vacant for more than six months will face increased yearly vacancy rates.
Furthermore, foreign owners of established residences who have been vacant for more than six months would be charged a higher yearly vacancy fee.
Under the new proposal, that fee, which is currently the same as the foreign investment fee, will be doubled.
The double blow would result in a six-fold rise in annual costs for immigrants who leave existing residences unoccupied.
However, it is uncertain if foreign ownership of existing residences in Australia poses a significant problem for the rental market.
According to Australia’s treasurer, vacancy fines levied on foreign owners of established properties raise just approximately $5 million per year.
There were just 23 similar violations in the previous year, according to Chalmers, but he believes the figures are likely exaggerated.
The government also stated that it would reduce costs for foreign investors in build-to-rent projects.
The government set up a $10 billion investment entity last month to help improve the supply of social and affordable homes.
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