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"Foreign investors who buy up Australian houses and leave them empty are set to be slugged with higher taxes in a major move aimed at helping more people into homes. The changes announced by the government on Sunday, will make it harder for foreign nationals to buy existing homes, directing them instead to invest in new projects and make them available for Australians to rent affordably. Under the adjustments to the foreign investment framework, fees for the purchases of established homes will be tripled, and increased penalties for those that leave properties vacant – doubled for all foreign-owned dwellings purchased since 9 May 2017. It will mean a six-fold increase in vacancy fees for future purchases of established dwellings. Treasurer Jim Chalmers said while foreign investment plays a “crucial role” the reform would “put more properties on the rental market”. “It’s about boosting housing stock and getting more homes onto the rental market,” he said. “It recognises that the rules here are already pretty tight, but we want to make them tighter.” At present, foreign nationals can only purchase an existing property in Australia under limited circumstances such as if they are coming her to live for work or study. They are required to sell the property when they leave the country if they have not become a permanent resident. The changes encourage foreign nationals to buy new property instead. The government will also give the ATO an enhanced compliance regime, to ensure any foreign investment in residential property is “in our national interest”. Application fees for foreign investment in Build to Rent projects will also be cut in a bid to boost the number of rental homes in the country, Dr Chalmers said. But Nationals leader David Littleproud said Australia should suspend all foreigners from buying residential homes to live in amid the housing crisis. “Australians should get a priority on buying homes in Australia, we have a supply issue,” he said. “Why wouldn’t we just take the step not to allow somebody to have the luxury to allow somebody to have the luxury to fly in and stay in a home for a couple of months every year when there are Australians trying to get into the housing market. “That would seem common sense to me, rather than some window dressing and fines that they’re probably able to pay anyway.” NSW Premier Chris Minns said if the new federal tax could ensure more properties on the market for renters, “that’s a good thing”. “We’ve seen rents spike by 24 per cent in a single year on apartments in Sydney, which is the largest increase in history, certainly for many decades,” he said. “We know we need to make changes because at the moment, we’re losing a lot of young people from particularly metropolitan Sydney.” Australia has lowest rental availability The changes to the framework comes as the government prepares to unveil its migration strategy on Monday, and its mid-year budget update on Wednesday. Dr Chalmers has ruled out the potential of a second surplus in the 2023-24 financial year, but confirmed gross debt as a share of the economy will peak lower than forecast. The government inherited about a trillion dollars in debt, but Dr Chalmers said that was now “much closer to $900bn”. “That saves us tens of billions of dollars in interest costs,” he said. “One of the fastest growing areas of spending in our budget is actually the interests costs on the debt that we’ve inherited. By dealing with the debt, by getting the budget in much better nick, by delivering that surplus, by getting the deficits much smaller, we avoid a big chunk of interest costs, and that means we can use that money to either repair the budget, invest in cost of living relief, or invest in the future of our economy.”"
<https://www.countryman.com.au/business/jim-chalmers-announces-foreign-investment-tax-changes-to-boost-rental-supply-c-12850483>