Jim Chalmers’ $455m hit to foreign investors
Foreign investors will be slugged with a doubling in application fees, in a move estimated to raise an additional $455m in budget revenue.
Foreign investors will be slugged with a doubling in application fees, in a move estimated to raise an additional $455m in budget revenue over the four-year forward estimates.
Jim Chalmers said the Albanese government was “delivering on its election commitment to increase foreign investment fees and penalties”.
“Decisions like this are made necessary by the state of the budget we have inherited from our predecessors,” he said.
Foreign investment applications are separated into residential, agricultural or commercial assets, and the applicable fees rise through a number of tiers according to the size of the proposed investment.
For example, under the new fee structure which comes into effect from July 29, proposals to purchase residential property worth $1m, agricultural assets worth $2m, and commercial transactions worth $50m will attract an application fee of $13,200, rather than $6600.
A proposal to invest $10m in residential land would cost $237,600 in application fees, instead of $118,800, as would a proposal to spend $20m on agricultural land, or $500m on a commercial asset.
Despite the hike, the Treasurer said “foreign investment fees will continue to make up only a small proportion of total foreign direct investment”.
“Foreign investment application fees ensure the cost of administering the foreign investment framework is not borne by Australians, and penalties encourage compliance with our rules,” he said.
The additional imposts on foreign investment comes after the previous government introduced major reforms to rules around foreign investment, including a national security test to be applied to investments in what are deemed “sensitive” assets, such as key infrastructure.
Most controversially, the changes also gave the Treasurer a power of “last resort” to impose additional conditions.
“Australia continues to be an attractive place for investment,” Dr Chalmers said.
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