Reins tightened for developers aiming projects at foreign investors in 2017 Budget
Developers who aim projects at foreign investors are facing bleak times under the Budget package.
New developments will be subject to a 50 percent cap on foreign investment off the plan sale approvals to “safeguard the opportunity for Australian buyers to purchase”.
The new regulation applies only to developments with at least 50 units.
The current level is 100 percent after the Rudd government lifted it from 50 percent during the global financial crisis.
"We will restore the requirement that prevents developers from selling more than 50 percent of new developments to foreign investor," the Treasurer said.
Meanwhile, foreign investors in residential real estate will be slapped with a “ghost tax” if they leave their properties empty or not available for rent for at least six months of the year.
The annual charge will be equivalent to the foreign investment application fee which was paid at the time of application and will work out to at $5000 plus annually.
The measure is expected to net $20 million in revenue over the next four years.
Earlier in February Property Observer published an article by Robert Simeon where the agent suggested the need to reverse the off-the-plan ratio back to 50 percent from 100 percent to overseas buyers.
"We are now going into the ninth year of 100 percent and the only clear impact we are seeing is that foreign investors have become a most dominant player," he wrote.
