Foreign investment changes: Clarity on new civil penalties for vendors required

24 April 2010

The Federal Government needs to clarify its plan to impose ‘civil penalties’ on people selling homes when the purchaser has breached foreign ownership rules, according the Urban Taskforce.


The Taskforces chief executive, Aaron Gadiel, said he was concerned that vendors could be made responsible for checking the immigration status of home purchasers.


If youre selling your home to someone, you should not be subject to prosecution just because the purchaser has misled you or failed to comply with foreign investment rules, Mr Gadiel said.


This is an issue the Federal Government will need to consider carefully there is a danger this will just lead to more red tape.


Mr Gadiel welcomed the fact that the rules for foreign purchasers of new housing stock had not been changed.


Foreign purchasers can play an important role in supporting the development of new rental properties for Australians, Mr Gadiel said.


The recent debate about foreign investment in residential housing has glossed over the role foreign purchasers can play in boosting the supply of rental homes.


“Its in our national interest to have a strong supply of housing.


“Given that our national housing undersupply is reaching 200,000 homes, we should welcome any investment by foreign residents or businesses in boosting our supply of newly built homes.


“A renter will not be fussed if their landlord lives in Australia or overseas they just want a home.


“By allowing foreign investors to purchase newly-built housing, more home development is made possible, which in turn means more homes available to renters.


“This will help mitigate the strong upward pressure on residential rents arising from our chronic undersupply of housing.”


Mr Gadiel said that he did not expect that the change to the rules for temporary residents will improve housing affordability.


The underlying issue for housing affordability in Australia is a lack of housing supply.


Governments should tackle inefficient state planning systems and development levies first and foremost if we want housing to be affordable.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.


The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.



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