FIRB Update – Fee changes aimed at Australia’s current housing crisis
On 10 December 2023, the Federal Government announced that 2024 would see the introduction of new legislation, tripling FIRB application fees for foreign residents purchasing established dwellings and a reduction in FIRB application fees for build-to-rent projects. The changes are aimed at ‘improving housing and affordability and supply” within Australia. Further in a bid to encourage foreign owners of established dwellings to make their properties available for rent if not occupied as a residence, the legislation will see the annual ‘vacancy fee’ doubled to equal that of the application fee paid to purchase the property. It is not clear yet if the changes to FIRB residential land fee rules will apply to developers who purchase land for the purpose of redeveloping it into projects such as new housing, aged care facilities, student accommodation or disability accommodation.
It is no surprise that the Government also intends to enhance the ATO compliance regime to ensure foreign investors comply with the rules. Whilst no specifics have been released, it is likely that such changes will see an increase in infringement notices being issued and court applications by the Government for criminal and civil penalties.
The introduction of new legislation will not affect fees for the purchase of new dwellings and vacant residential land.
For advice on FIRB requirements and how the above changes may affect you, please contact Jessica Murray at jessicam@qbmlaw.com.au or Megan Saroff at meganh@qbmlaw.com.au.
