Jim Chalmers has said the government has no idea how many homes bought by overseas investors are sitting vacant in Australia.
I asked in senate estimates how the government plans to fine foreign owners of empty houses if they can’t even find that out. It’s just a thought bubble so Labor can try to look good without actually doing anything.
Just ban foreign ownership altogether!
Transcript
Senator ROBERTS: Thank you for appearing today. My questions are on Treasury’s plans to find foreign investors who leave properties that they own vacant. How you going to enforce that? Even Treasurer Jim Chalmers said we have no idea how many are being left vacant. Are you going to send people around doorknocking to see if there are any empty homes? It sounds like headline grabbing to me.
Ms R Kelley: As we’ve mentioned before, the Australian Taxation Office does have a compliance function that specifically deals with the vacancy issue. I have a colleague here from the ATO who can assist in answering the question, but they have a very well-established compliance program. They do look at the vacancy rate and they do enforce that when houses are left vacant for more than 183 days per year; they do actually follow up. I’m sure we can get some numbers, if you like, in terms of recent action by the ATO, but part of the government’s announcements around the increase in fees was also that increased resources were being given to the ATO to assist in strengthening that compliance approach.
Senator ROBERTS: Thank you, Ms Kelley.
Mr Thompson : That’s correct. I thought I might briefly explain how we enforce the existing vacancy fee rules. Obviously, these are amendments to the rates, but they don’t change our enforcement approach. People who are in scope—in the population in 2022-23 that was about 12,500—that we track are required to lodge a vacancy fee return every year. Some of those foreign investors declare to us that the property is vacant, in which case we levy them the vacancy fee. We also conduct compliance activities on the remainder of the population. For those foreign investors who don’t lodge a return, we deem a vacancy fee on them and they need to contact us if they think that we have deemed that fee incorrectly.
Senator ROBERTS: How accurate is your register of foreign owners? Have you done any testing on it to make sure all the foreign owners are in fact registering?
Mr Thompson : Yes. As we explained in some questions on notice following the last estimates, we get the full data set for the real property transaction registry. For example, in 2022-23 the number was around 2.4 million individual entries. We work through a range of data-matching techniques to get that down to a potential compliance pool in the thousands and then we publish our compliance numbers, and they’re generally in the hundreds. In that sense, we’re very confident about the in-scope population under the Foreign Acquisitions and Takeovers Act rule.
I would make the point that there is sometime debate about the exact numbers, and I think that goes to the different definitions that different regimes use. For example, we’re aware that the rule of the Foreign Acquisitions and Takeovers Act is slightly different from state and territory land tax acts. There’s also a NAB survey that is run every so often, and that asks the question about overseas buyers, as opposed to foreigners. When people talk about the numbers—I’d say we’re very confident of the numbers under the Foreign Acquisitions and Takeovers Act definition, but that’s not to say that, if people are using different definitions, you might not come up with different numbers.
Senator ROBERTS: That’s a question I’ll ask later, in another session. When it made its release, the government said it expects to collect $500 million a year in these extra changes—$170,000 per person. If the charge is $170,000, that’s less than 3,000 homes, and many of those 3,000 will probably still stay vacant because foreign buyers are rich and can probably afford to just pay the charge. Has Treasury conducted any modelling on how many of those 3,000 they expect to become occupied because of this thought bubble? You just mentioned 12,500 vacancies.
Ms R Kelley: I think we need to clarify that the predicted revenue is based on the total application fees as well as the vacancy fees.
Senator ROBERTS: How many houses do you expect to be trapped in this scheme?
Ms R Kelley : It depends. Every year there are different numbers. In the last financial year, 3,542 houses were purchased by foreign investors, so they would definitely be captured. The people who are purchasing are captured. The application fees have been tripled. They range with the value of the property, and the application fee increases with the increase in the property value. Then you have the numbers that Mr Thompson was talking about in terms of the number of houses that are already purchased and registered and that the vacancy fees apply to. The calculation around the revenue are based on those sorts of numbers as well. It’s both factors.
Senator ROBERTS: Minister, it makes it really simple, doesn’t it? Why not ban all foreign ownership of housing? That would solve the housing crisis.
Senator Gallagher: I am not sure it would when we look at the numbers involved in the evidence that’s just been given, and that is not the government’s position.
Senator ROBERTS: Why isn’t it the government position? There are Australians in caravans, tents and cars.
Senator Gallagher: Again, there are a number of reasons why there is pressure in the housing market at the moment, whether you be renting, homeless or seeking to buy your first home. Not all of that can be attributed, as I think you would like to argue, to foreign ownership.
Senator ROBERTS: I am not saying ‘all,’ but I am saying massive immigration is driving up housing prices.
Senator Gallagher: That, again, is a different issue to the subject of foreign ownership. You’ve been given the numbers today.
Senator ROBERTS: We’re concerned about Australians residents and citizens in tents, caravans, cars, under bridges—
Senator Gallagher: That is why we have all the effort on the housing side to generate supply.
Senator ROBERTS: Thank you, Chair.
Foreign ownership has got to stop. We are selling off this country to foreigners who have no love or loyalty towards Australia. Fight the Good Fight Malcolm.
Thanks for flagging this issue and shedding a bit of light on it.
We might as well just hand over the key to China and let them take over as they will one day. At the moment China could take Australia with a phone call.
I, amongst others in my local community, have notice many homes purchased by overseas buyers standing vacant, sometimes for years, not months. This, while citizens of Australia can’t find accommodation. When the tenancy turn over comes around the occupancy is not made available to local cotizens but only somehow advertised and available to these overseas people again. Our society is being fractured greatly by people who have no interest in Australis as a country, but only something from which to make money which is returned to the country overseas of origin.
Australia us diminishing under the wright of foreign investment. The sellout has to stop!
I wonder what the average price of these foreign owned properties is? And how many in total are foreign owned? I first do t agree in houses should be used as an investment as it is used to falsely escalate their price by government, councils, and many other industries for profit at the expense of people with ordinary means of income. Everyone has a natural right to have a roof over their head but all these special interest groups make them expensive and scarce to for their gains. Housing is as essential as food, water and clothes and should t be monopolised. The government could buy the investment properties and lease them to first home buyers with the rent returning equity in the house at 1% fixed interest or less. The government would get the money back and renters would become home owners. And if they want to move to another property then the equity can go with them without having to buy or sell a property. Eventually housing prices will plateau and everyone will own homes. If you inherit a home then it has to be sold to a new home owner or the government or live in it yourself. We must fight this corporate control of everything. Banks and realty industries are major profiteers and lobbyists of this industry. It has to stop. Land must also be made available. The only people to make a living out of homes are trades people who actually give value in building and repairing homes. Nobody else otherwise it’s just modern feudalism.
Why are foreign investors even allowed to buy Australian houses? That in itself is a ridiculous state of affairs. Australians are living out on the streets while houses are sitting empty.
I wonder if the government has reflected that all their efforts to increase housing supply will simply be swallowed up by new arrivals. They will spend a fortune and have nothing to show for it – hardly a winning formula.
It makes one wonder who is really calling the shots. Who benefits from this relentless immigration? It certainly isn’t the average Australian. It certainly isn’t the young family who can hardly find somewhere decent to rent, let alone buy a place of their own. Who is the government governing for?
Senator Roberts, as you quite rightly said, “We’re concerned about Australian residents and citizens in tents, caravans, cars, under bridges”. And Senator Gallagher just brushed that off. But the big issue here is, NOT ENOUGH HOMES FOR PEOPLE TO RENT OR BUY.
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