Labor pledges two-year ban on foreign housing investors, mirroring Coalition promise

Federal Labor has pledged to ban foreign investors from buying established homes for at least two years, replicating the promise made by Opposition Leader Peter Dutton in his budget reply speech last May.

From April 1, foreign investors will be banned from buying established property until March 31, 2027. The policy includes an exemption for developments of at least 20 properties.

Figures from the Foreign Investment Review Board show foreign buyers spent $4.9 billion in 2022-23, purchasing 5360 pieces of residential real estate.

Housing Minister Clare O’Neil said, despite the small number of foreign-bought homes, she strongly believed in orienting all efforts towards securing home ownership for young Australian people.

Housing Minister Clare O’Neil believes in orienting all efforts towards securing home ownership for young Australians.Credit: Alex Ellinghausen

“This isn’t a silver bullet because there is no silver bullet. But this is an important piece of Labor’s absolutely massive housing agenda,” she said.

The decision to follow the Coalition’s housing policy highlights Labor’s desire to avoid political fights about housing, with the coming election expected to be dominated by debates on which party can best manage the housing crisis.

Asked whether the announcement copied Dutton’s pledge, O’Neil argued that when the Coalition was in government, it “did nothing about the housing crisis”.

“I really don’t care about the politics of this. Everything we do on housing is about getting more Australians into their own homes, and this change will play a part in that.”

The government’s pledge includes $5.7 million over four years for the Australian Taxation Office’s foreign investment compliance team to enforce the ban and enhance screening of foreign investment proposals.

In addition, $8.9 million over four years will be allocated to the Tax Office and Treasury to audit foreign investors acquiring vacant land.

The Coalition’s plan does not prevent foreign investors buying into new apartment towers or housing projects, due to the role of offshore funding in encouraging construction.

Exclusive polling by this masthead revealed in January that 69 per cent of voters favoured the Coalition’s policy as a way to help local bidders get into the housing market.

Labor’s announcement contradicts criticism of Dutton’s policy when it was unveiled last year. At that time, Treasurer Jim Chalmers dismissed the plan as “not thought through”.

Chalmers also made changes in February last year to triple foreign investment fees for the purchase of established homes, and double the vacancy fees for dwellings left empty.

Speaking generally about the coming election on Saturday, Dutton told reporters in Ingham, in North Queensland, the Albanese government’s policies were fuelling a “mood for change”, maintaining his party was the underdog.

“It’s not just a cost-of-living crisis, it’s a housing crisis [that the government has] created by bringing too many people in and not building enough homes. That’s why people’s rates have gone up,” Dutton said.

“I do believe that we can win the next election, and we must – because the alternative is a Labor-Greens minority government, which will be a disaster.”

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