Foreign real estate investment is a hot topic in the Australian property arena and it will be interesting to see how the tightened rules delivered in May’s federal budget affect the market. In a bid to address inflated property prices and housing affordability, the government announced stronger rules for foreign investors.
It introduced a 50 percent cap on foreign ownership in new developments along with an annual charge on foreign owners who buy residential property and leave it vacant. It also tightened the foreign investor tax integrity rules to reduce avoidance of capital gains tax on Australian property.
In the year to May 2017 there was a $55 billion increase in all approved foreign investment in Australia, to $248 billion, "predominantly driven by increased investment in the real estate sector" according to FIRB chairman Brian Wilson. Of that, Chinese buyers led the way, investing $31.9 billion in Australian real estate.
