Big Changes Are Here
Starting April 9, 2024, foreign investors in Australian residential property will face some hefty fee increases. The government has tripled application fees for certain property types and doubled penalties for leaving properties vacant. If you’re planning to invest, here’s the lowdown on how these changes might affect your wallet.
What’s the Deal with These Fees?
1. Application Fees Are Skyrocketing
- Fees are now tied to the property’s value and whether it’s a new, near-new, or established dwelling.
- From July 1, 2024, to June 30, 2025, expect to pay:
- $26,400 for a property worth $1.5 million.
- If you’re buying a partial share, you only pay your percentage of the fee. For example, Sara, a foreign investor buying 25% of a $1.5 million property, pays $6,600.
2. Changing Your Application? That’ll Cost You
- Small changes will cost $4,300.
- Major changes? $29,500—but it’s capped at your original application fee if it’s lower.
3. Got a Vacant Property? The Penalty Just Doubled
- Leave your property vacant for 183 days or more, and you’ll owe double your original application fee.
- Example: Rishi, who paid $28,200 for his exemption certificate, will owe $56,400 if his Sydney apartment is empty for six months.
4. Developers, Heads Up
- Developers applying for exemption certificates now face a $60,600 fee. Plus, there’s a separate fee for each property sold to a foreign buyer under the certificate.
When Do You Need to Pay?
You’ll need to pay a fee when:
- Applying to buy a specific property.
- Applying for an exemption certificate to buy non-specified properties.
- Requesting changes to an existing approval.
And remember: Fees must be paid in full before your application will even be reviewed.
Why the Fee Hikes?
The Australian government is tweaking its foreign investment rules to:
- Better manage housing supply.
- Fund the review process for applications.
- Tackle imbalances in the property market.
In short, these changes are meant to make the process fairer while ensuring foreign investors contribute more to Australia’s economy.
Key Takeaways for Investors
Fee Waivers Are Rare
In some limited situations, you might qualify for a waiver. It’s worth checking if you’re eligible.
Fees Adjust Annually
Every year on July 1, fees are updated to keep up with inflation, so stay informed about changes.
Developers Have Extra Reporting Requirements
If you’re a developer, you’ll need to report sales made to foreign buyers every six months. Be ready for additional paperwork and fees.
What Does This Mean for You?
If you’re a foreign investor or developer, these changes mean planning and budgeting are more critical than ever. It’s a good idea to talk to legal and financial advisors to fully understand the impact and avoid unexpected costs.
Bottom Line: Yes, investing in Australian property as a foreigner is getting more expensive. But with the right approach, it’s still a market full of opportunities.
For more detailed information, check out the official Australian Taxation Office page on foreign investment fees.
