Prime Minister Tony Abbott announces stricter rules for foreign property investors

[KangaBanga]

SMH : New fees, fines for foreign property investors

[The scheme could raise about $200 million a year by charging foreign home-buyers $5,000 for properties valued under $1 million and an additional $10,000 for every additional $1 million, Treasurer Joe Hockey said on Wednesday.]

[Mr Hockey said a register of foreign nationals buying real estate would be established and those who break the law would face a fine up to a quarter of the value of the property and could be forced to sell.

These integrity measures are absolutely essential for reassuring Australians when they go to an auction they are on a level playing field, Mr Hockey said.]

[Australian property has long been a popular choice for Chinese money - both legitimate and illegitimate - but the flow of investment appears to have accelerated.

Australia's foreign investment review board says China was the No.1 source of foreign capital investment in real estate in 2013, approving nearly $6 billion of investment, up 41 per cent from a year ago.]

[They will be subject to discussion for four weeks before they are finalised.]

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Will this have any effect on the property market? looks like the coming month is gonna get very interesting, especially for Sydney / Melbourne market. 1/4 of property price fine followed by a force sell is gonna really hurt.

If there is a sudden surge in listings then we'll know there is a lot of rule flouting by "foreigners".

 

[virgo]

Hiya

$5000 for values up to 1 million seems a bit low....IMHO...

Just came back from Singapore which had run away prices too due to foreigners influx....

(my friend bought a tiny 2 bedder apt for 560K about 4 years ago; recently revalued 1.25 millionnothing special too....and you think Aussie prices are too high?)..all my friends are multi millionaires...

To pacify the local population. the Singapore govt implemented wave and wave of "cooling prices" measures; 7 sets all up; all failed....EXCEPT the latest one:

13% Stamp duty for foreigners and a cap of 60% LVR...how's that??? ie an average one million apt price and the govt gets to keep 130K ..

Now how's that compared to Tony Abott's measure????

 

[Aaron Sice]

probably introduced to pay for these.

Australia to purchase Reaper attack drones from the US @ $300mil

 

[Biz]

Wet lettuce scheme. They should have to pay double stamp duty.

 

[Aaron Sice]

13% Stamp duty for foreigners and a cap of 60% LVR...how's that??? ie an average one million apt price and the govt gets to keep 130K ..

but that measure doesn't create 3 new govt depts, one oversight body and a whole lotta redundant public servants on minimum wage.

 

[sanj]

Wet lettuce scheme. They should have to pay double stamp duty.

that would not result in a single dollar going to the federal govt...

 

[Biz]

that would not result in a single dollar going to the federal govt...

They make the law they can direct the funds where they want. Double it, half to state and half to federal gov. They could even give it a fancy new name like foreign investor duty. Imagine that!

 

[Redom]

that would not result in a single dollar going to the federal govt...

I think its just a cost recovery exercise built to have more people in FIRB do some actual compliance. I worked in the building next door for years and have some good mates there, there's literally only a small team of 6ish people that work in the property team. They get a pretty bad rap from the public, but its simple because theres very few people there.

They don't have the firepower to do any compliance so there'll be obvious issues that fall through the cracks without any monitoring done. I believe the plan is to use these funds to ramp up the team significantly and do some actual checking. Pretty sure it was a recommendation from a Senate enquiry into foreign purchases.

 

[chilliblue]

Figures are way too low. 10% on all purchases with a minimum of $10K.

 

[spludgey]

Does foreign mean non-resident or non-citizen?
If it's the latter, I should go and finally get that Australian citizenship.

 

[TomW]

I think its just a cost recovery exercise built to have more people in FIRB do some actual compliance. I worked in the building next door for years and have some good mates there, there's literally only a small team of 6ish people that work in the property team.
QUOTE]

This. There will be civil penalties of up to 25% of the cost of the property plus they can force them to sell the property.

 

[Paul@PFI]

Does foreign mean non-resident or non-citizen?
If it's the latter, I should go and finally get that Australian citizenship.

Residency. Only two countries use Citizenship as a tax basis...USA and Eritrea. Fun fact.

Many people have dual citizenship. Many residents aren't citz. You can be a citz and non-resident.

 

[Deltaberry]

Obviously the measure is designed as a cash grab rather than to stop non Australians inflating the market.

 

[TomW]

Obviously the measure is designed as a cash grab rather than to stop non Australians inflating the market.

How is it a cash grab when it's going to enforcing the existing laws?

 

[KangaBanga]

well its going to take a month to discuss and come up with something final. Guess what, the NSW elections are scheduled to happen in a months time too..

Compliance should be easy to check in 2 steps by one person.

1) take a list of all non-new property owner names from the land office database

2) Exclude those names with a list of resident/citizen names from Immigration database

Any leftover names will be non-residents as they don't have medicare.

Enforcement may require a special task force set up to seize each property and record fines, size depending on how many names end up on the list.

 

[TomW]

Good to see Hockey give him a good slap:

Treasurer Joe Hockey announced the forced sale of the $39 million Point Piper mansion Villa del Mare, purchased by one of China's richest men in November, because it was sold in contravention to the existing foreign ownership laws.

The extraordinary measure has shocked prestige agents who had believed the purchase did not require approval from the Foreign Investment Review Board because the purchase was in the name of an Australian company.

However, a spokesman from Mr Hockey's office said the sale was an illegal purchase because Golden Fast Foods was a shelf company for the Hong Kong-based Evergrande Real Estate Group.

If the company had sought FIRB approval it would have been rejected too because the rules are quite simple, foreign buyers are not allowed to purchase established property," said a spokesman from Mr Hockey's office.

http://news.domain.com.au/domain/re...r-mansion-villa-del-mare-20150303-13twhs.html

 

[KangaBanga]

How Billionaires in London Use Secret Luxury Homes to Hide Assets

[On London?s Billionaires Row in Hampstead, the seven-bedroom Carlton House with its 50-foot ballroom, underground swimming pool and 10-person Turkish bath is for sale for 14 million pounds ($21.5 million).

It?s being sold to repay BTA Bank after British courts seized assets from the Kazakh lender?s one-time chairman, billionaire Mukhtar Ablyazov. The lender accused him of embezzling about $6 billion from the bank, claims he says are false and politically motivated.

It took the U.K. High Court to establish that the home, with its marble bathrooms, crystal chandeliers and cherry-wood elevator, belongs to the 51-year-old, because the property was bought through a network of offshore companies that hid his identity. He argued it was his brother-in-law?s and he just rented it after his family moved to England in 2009.]

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Looks like its not a cash grab but the FIRB are really serious, even checking beyond the buying company.

Seems in line with what the british are doing in London.

EDIT : actually could still be seen as a cash grab. After auctioning off the property, the gov gets to keep the original 2.6million stamp duty as well as charge another couple million stamp duty for the auction sale.

 

[JDP1]

Hiya

$5000 for values up to 1 million seems a bit low....IMHO...

Just came back from Singapore which had run away prices too due to foreigners influx....

(my friend bought a tiny 2 bedder apt for 560K about 4 years ago; recently revalued 1.25 millionnothing special too....and you think Aussie prices are too high?)..all my friends are multi millionaires...

To pacify the local population. the Singapore govt implemented wave and wave of "cooling prices" measures; 7 sets all up; all failed....EXCEPT the latest one:

13% Stamp duty for foreigners and a cap of 60% LVR...how's that??? ie an average one million apt price and the govt gets to keep 130K ..

Now how's that compared to Tony Abott's measure????

yeah the rates abbots charging isn't going to make much difference at all for foreign investors. Negligible impact to demand.

 

[Cassandra]

probably introduced to pay for these.

Australia to purchase Reaper attack drones from the US @ $300mil

The Raytheon lobbyists in Canberra are finally earning their keep.