The Australian Federal Government has recently introduced a Bill into Parliament, which in its current form, would significantly increases fees for an acquisition in Australian housing. The increase in fees is aimed at increasing the available housing stock.
Currently, foreigners must pay the following fees when applying to acquire Australian residential property:
| Residential property and exemption certificate application fees, for acquisitions in residential land from 1 July 2023 to 30 June 2024 | |
| Amount ($AUD) | Fee per action |
| Less than $75,000 | $4,200 |
| $1 million or less | $14,100 |
| $2 million or less | $28,200 |
| $3 million or less | $56,400 |
| $4 million or less | $84,600 |
| $5 million or less | $112,800 |
| More than $5 million | Refer to the Foreign Investment website |
(Source – Australian Taxation Office)
The bill proposes that the fee for an application to acquire existing residential property will be tripled.
Foreign nationals are generally banned from acquiring existing property, but can do so in limited circumstances such as when they have a temporary visa to work in Australia.
In addition, the Bill proposes to double the amount of vacancy fees. The vacancy fee is currently the same amount as the acquisition fee on the property.
Foreign owners of Australian residential property acquired after 9 May 2017 are required to file an annual vacancy fee return, even if the property was residentially occupied or genuinely made available for rent during the year. This requirement may also apply where a foreign person acquired the residential property prior to 9 May 2017 but failed to submit a foreign investment application.
A vacancy fee is payable by a foreign owner if the residential property is not:
A vacancy fee may also apply if the vacancy fee return is not lodged by the required due date,
As an example, a foreign investor who acquires a new apartment for $1.5 Million will pay $28,200 on application.
If that investor leaves the property vacant, then they will pay a vacancy fee of $56,400 per year. This fee may also be payable where the vacancy return is not lodged by the due date.
The new fees will occur from the later of 1 April 2024 or when the Bill receives Royal Assent.
For further information please contact your usual Exant advisor or alternatively one of our tax expert Jamie Towers on 07 3218 3900.
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