Foreigners slugged in first step towards Labor budget repair

Foreigners looking to buy property, farms and businesses in Australia will be the first to help rebuild the federal budget bottom line, with a sharp increase in fees and penalties to net almost $500 million in extra revenue.

Treasurer Jim Chalmers will on Friday confirm the plan to lift costs on foreign investors from next week.

Fees paid by foreign investors to buy property, farms and businesses will double from next week.Credit:Glenn Hunt

During the election campaign, Labor revealed it would double application fees to the Foreign Investment Review Board as part of a string of measures aimed at increasing revenue.

The budget is forecast to be in deficit by $78 billion this financial year, although indicative figures released last month suggest strong revenue flows and reduced expenditure have improved the nation’s finances.

Gross government debt is expected to breach the $1 trillion mark in 2023-24.

Chalmers said the increased fees would raise revenue without having an impact on foreign investment levels.

“Decisions like this are made necessary by the state of the budget we have inherited from our predecessors. We will always put Australian interests first. That means ensuring Australians benefit from foreign investment in Australia,” he said.

“Australia welcomes foreign investment that is in Australia’s interests. 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.”

Under the changes, fees for residential properties, farms or businesses worth less than $75,000 will climb to $4000, from $2000. On residential properties worth between $4 million and $5 million, farms worth between $8 million and $10 million and businesses worth between $200 million and $250 million, fees will double to $105,600.

The maximum fee on residential properties, farms and businesses will rise to $1 million from $500,000.

The changes are expected to raise about $72 million this financial year, reaching almost $130 million in 2025-26. They come into operation from July 29.

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