Australia is making it harder for foreigners to acquire residential properties or businesses.
They will be subject to a range of civil penalties and fees under proposals announced recently by the government, BBC News reported Thursday.
The proposals follow moves to curb foreign investment in agricultural land.
The government of Prime Minister Tony Abbott wants foreign investors who buy Australian property worth up to A$1 million (US$785,000) to pay a A$5,000 application fee.
Those who apply to buy a business worth A$1 billion or more would be asked to pay A$100,000.
Foreign investors who fail to comply are liable to a fine of 25 percent of the value of the investment and could be forced to sell the property.
A register will be established to record how many foreign residential and agricultural property owners are in Australia and who they are.
Property prices are a hot button issue in Australia, especially in Sydney, and there are claims foreign investment is artificially boosting house prices.
But Abbott said there is not enough data on the issue.
He ruled out reviewing Australia’s negative gearing rules, which some property analysts say also fuel property prices.
Negative gearing is when an investment generates a negative cash flow and allows the investor to claim tax deductions.
The government said Australia’s foreign investment policy for residential real estate had been designed to increase Australia’s housing stock but a lack of compliance and enforcement of the rules in recent years had threatened the integrity of the policy.
Tim Harcourt of the University of New South Wales Business School said investors can afford the fees.
In fact, so called “foreign buyers” are actually Australians of Chinese or Indian descent, he said.
“Smaller players looking for long-term investment for their children or residency and citizenship will see it as a price worth paying to improve the outlook for future generations.”
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