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The Real Estate Institute of Australia is seeking a new foreign investment fee structure for the residential property sector.
The organisation has fronted a Senate Economics Committee to give evidence on the Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2020. REIA President Adrian Kelly said that fees should be structured to reflect the cost of undertaking the assessment and administration by the Australian government, rather than imposing what REIA called “unnecessary impediments” on foreign investors entering the property market.
“Foreign investment in the residential property market is the lowest it has been since 2015-2016,” Kelly told the committee. “We understand from our agents working in this area the cumulative impact of Commonwealth and state government fees has contributed to decreased demand from foreign investors. It has been our proposal to Treasury, and now this committee, that fees should be equitable and simply reflect the cost of assessment and processing by [the Australian Foreign Investment Review Board].”
Kelly said that while COVID-19 has prompted all levels of Australian government to deregulate and be more investment-friendly, REIA felt the fee-setting framework in the bill didn’t measure up to these policy aspirations.
“This is not just across the board but for each category of fees,” he told the committee. “That is, residential property applications should not be offsetting or subsidising the cost of administration in other categories. The proposed fee structure within the ‘fees’ bill this committee is tasked to inquire on ignores all of the above. In short, unnecessary impediments should be removed for foreign investors looking to invest in Australia’s residential property market.”