The real estate sector has hit out at plans to impose new fees on foreign investors buying property in Australia, announced yesterday by the Abbott government.
Under the proposed changes, offshore investors must pay a $5000 application fee to acquire a residential property under $1 million and a $10,000 fee for homes worth $1 million as well as an extra $10,000 for every additional million dollars. Anyone caught flouting the laws will be fined 25 per cent of the purchase price and forced to sell.
Ray White Real Estate chairman Brian White told The Australian Financial Review that the changes could have a significant negative impact on house prices.
“The amounts now proposed have the potential to shock the market – and no market appreciates or responds well to shocks,” he said.
Similar sentiments were echoed by CBRE, though Melbourne-based buyers advocate David Morrell said the moves in fact did little to address the problem of offshore investment raising local home prices.
“Clearly they know there is a problem. It hasn’t been fixed and I’m not sure the framework is tough enough to realistically do it,” he told the AFR.