Foreigners who leave homes vacant could soon be taxed

Foreigners who leave homes vacant could soon be taxed
Foreigners who leave homes vacant could soon be taxed

The Federal Budget may unveil a tax on properties owned by foreign investors who leave them vacant for a period of time, as part of measures to improve housing affordability.

The levy will be part of the conditions imposed by the Foreign Investment Review Board when overseas buyers are approved for Australian property purchases, Sky News reported.

The fee charged to foreign investors who leave their properties vacant could be as much as $5,000, and would be on top of the fees they pay per property depending on its value.

It said the revenue raised from the scheme would be redirected into the government's wider package of housing affordability measures.

FIRB charges for investment approval are currently $5,000 for properties worth less than $1 million and $10,000 for those over $1 million.

A separate report in The Australian said the spokesman for Treasurer Scott Morrison declined to comment on the new report.

The Australian Taxation Office is in the process of building a nationwide register of foreign-owned land, under the Foreign Investment Framework, to identify which land is owned by overseas nationals.

This could be compared with water usage levels, kept by each state, to determine which properties are sitting vacant.

Earlier this month, Labor unveiled new measures if it came to power that will include adopting a nationally consistent Vacant Residential Property Tax, as recently imposed by the Victorian government, to curb investors buying properties and leaving them vacant.

Labor will also double the fines imposed on foreign investors who illegally purchase residential real estate. 

The Victorian government has decided to impose a tax on homeowners who leave their properties vacant in a bid to make housing more affordable in and around Melbourne, taking a leaf out of Vancouver's Empty Homes Tax.

The Vacant Residential Property Tax will be levied at 1 percent, multiplied by the capital improved value of the taxable property. 

Vancouver last year introduced a tax on owners of unoccupied homes. 

University of NSW research suggests up to 90,000 properties are sitting empty, while in Melbourne figures have shown almost 20 per cent of investor-owned homes were empty.

Foreign Investment Property Tax


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