Call to better track foreign property buyers - In the Press

The Australian16 March 2017

Around 2 per cent of all residential home sales in Victoria are to foreign purchasers, state government figures show, as experts call for better data on the number of sales to foreign buyers nation ally.

The proportion of sales to foreign purchasers in the state was steady for both last financial year and this financial year to date, according to Victorian Department of Treasury and Finance figures provided to The Australian.

This steady proportion of sales comes despite the increase in the state’s surcharge for foreign buyers from 3 per cent to 7 per cent on July 1 last year.

The 2 per cent figure does not include sales to foreign citizens who have permanent residency in Australia and are therefore not subject to the extra levy.

The Victorian data follows a call by the NSW opposition for a similar rise in the state’s foreign investor stamp duty surcharge from 4 per cent to 7 per cent.

The NSW opposition cited State Revenue Office data showing foreign nationals accounted for 11 per cent of home purchases in the state from July to September 2016, although this figure includes foreign citizens who have permanent residency in Australia and are not subject to the surcharge.

The data also showed some purchases were made by buyers of unknown citizenship.

The Australian understands that NSW government figures show 1.5 per cent of all NSW homes purchased were bought by foreign investors caught by the surcharges in the eight months since their introduction in June 2016.

Property Council NSW called the state opposition figures “bogus” and the use of the term foreign nationals “misleading”.

Experts called for the provision of better information about the number of sales to foreign buyers nationally.

The Australian Taxation Office is working with the states and ACT for a national register of foreign land ownership, which will not be complete until the second half of this year, an ATO spokesman told The Australian.

The last annual report of the Foreign Investment Review Board was dated April last year, and the ATO says the next report is set to be released shortly. Its data is broad, showing the board approved 36,841 purchases of residential real estate in 201415, across vacant land, new dwellings and existing property.

More information about foreign purchases would be useful, particularly when this category includes both offshore investors looking for a return and buyers with some ties to Australia, according to MacroPlan chief economist Jason Anderson.

“When we talk about someone who’s an overseas buyer — that category is not just someone who’s never been to Australia,” Mr Anderson told The Australian.

“I think more information is better, particularly when there’s a situation where … there are lots of people who are under 457 visas, who are not permanent residents in Australia but are living here for a long time.

“I would imagine that the majority (of foreign buyers) would be people who would definitely have some ties to Australia, and it’s a place to live either for themselves or a family member for a period of time.”

BIS Oxford Economics managing director Robert Mellor agreed it would be useful to have more information about foreign buyers, particularly given a glance at auction attendees in a multicultural society does not offer a reliable guide as to how many buyers are nonresidents.

The ATO had systems in place to track foreign purchases, but the question of whether they could be on top of everything is “a difficult one”, he said.

“There’s always people looking for ways to avoid detection.”

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