Dose

Fairfax: The Yellow Peril is upon us

502 posts in this topic

In the eastern suburbs of Melbourne, I've heard that RE agents are advising that $20k or $30k to demolish an existing dwelling is a good idea allow foreign bidders/purchasers.

So the consequence of recent (feeble) attempts to mitigate the impact of foreign buyers on the residential property market is to visibly reduce housing stock.  I assume this loophole was clear in any briefings to reassure RE lobbyists.

There is a simple solution - no residential home ownership by non citizens.  Foreigners here to study or work for a period can easily rent from numerous local investors. 

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In the eastern suburbs of Melbourne, I've heard that RE agents are advising that $20k or $30k to demolish an existing dwelling is a good idea allow foreign bidders/purchasers.

So the consequence of recent (feeble) attempts to mitigate the impact of foreign buyers on the residential property market is to visibly reduce housing stock.  I assume this loophole was clear in any briefings to reassure RE lobbyists.

There is a simple solution - no residential home ownership by non citizens.  Foreigners here to study or work for a period can easily rent from numerous local investors. 

 

So if you have an existing dwelling, demolish it and then build a new one, then that can be sold to foreigners?!!

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So if you have an existing dwelling, demolish it and then build a new one, then that can be sold to foreigners?!!

Yup.

 

I heard 20k to demolish, then the lot (LOT) is vacant, then you put it on market. No established house. Or just put it on the market first... nobody gives a sh*t anyway.

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So if you have an existing dwelling, demolish it and then build a new one, then that can be sold to foreigners?!!

 

Like Medved said demolish the existing dwelling then it's now a valid foreign purchase because it will require a new build. 

I don't know if there are any time limits on how long you can park your money there before having to build or if you can hold and sell to another foreign entity.

 

A farcical but possible outcome would be established inner suburbs with good schools becoming entirely vacant blocks!  Would a land tax mitigate this?

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Like Medved said demolish the existing dwelling then it's now a valid foreign purchase because it will require a new build. 

I don't know if there are any time limits on how long you can park your money there before having to build or if you can hold and sell to another foreign entity.

 

A farcical but possible outcome would be established inner suburbs with good schools becoming entirely vacant blocks!  Would a land tax mitigate this?

 

As the value of the land increases, so would the tax. However, a smart government should charge extra tax on any un-built land where development (residential, industrial, commercial) was approved to discourage land banking.

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A farcical but possible outcome would be established inner suburbs with good schools becoming entirely vacant blocks!  Would a land tax mitigate this?

I'm not seeing empty blocks often though. Normally a fugly McMansion is built on them or subdivided so two fugly townhouses are built. Almost every street in neighbourhoods around me have at least one site like this.

 

Three sites in my short street at the moment (another will be subdivided towards the end of the year). I know two are locals (Indian and Cambodian families), the third is Chinese subdividing, no idea if local or not. Probably locals as it's a dodgy builder/owner subdivision job.

 

You'd have to think with the billions flowing in from overseas that some of the sites are controlled by foreigners, even if it is a minority. It may be that the focus is more on established houses and using trusts or companies to hide who controls the title.

 

In speaking with Chinese I know they prefer 'free' state schools with a good reputation, such as in Balwyn and Waverley.

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In speaking with Chinese I know they prefer 'free' state schools with a good reputation, such as in Balwyn and Waverley.

 

ditto in Sydney.

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125 foreign real estate buyers use tax office amnesty to declare ownership

 

http://www.theguardian.com/business/2015/nov/10/125-foreign-real-estate-buyers-use-tax-office-amnesty-to-declare-ownership

 

The 125 investors have moved ahead of the deadline expiring on 30 November, the documents show.

 

A spokeswoman for the ATO said it had separately identified about 500 potential breaches of foreign investment laws it was investigating, a number of them from disclosures.

Edited by Mr Medved

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People really think its a bargain when the chinese stop bidding?

This is the peak guys.

House prices will be way cheaper in 3 years in A$

 

The only reason why people can afford those prices is that banks lend them money for decades.

This is the perfect setup for the Real Estate Crash 2.0 for the next 3 years.

When the Aussi-Dollar rebounds foreign buyers will not pay those prices anymore.

The high is in, sell, step back and watch the worldwide fireworks...

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So they've hired from both State Labor & Liberal. That should ensure smooth approvals!
 

 

A China-based property firm that has donated hundreds of thousands of dollars to Australian political parties has added former deputy premier Andrew Stoner to its payroll eight months after he left Parliament.

Mr Stoner has started a part-time, paid advisory position with Yuhu Group Australia, according to advice tabled by the NSW parliamentary ethics adviser, John Evans.

Yuhu Group has previously hired former NSW Treasurer Eric Roozendaal and also mysteriously paid thousands of dollars to settle a legal dispute for Labor Senator Sam Dastyari.

 

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Politicians being nice to their foreign friends?

 

"We have a serious crash coming but aren't allowed to tell you that we, as a government, are stopping wholesale support of the market so instead we'll force you to sell at the top of the market, I still get that job you promised me when I retire from government right?"

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Who gets the money from the sale?

The owner??

What percentage does the government get from the sale? Normal stamp duty??

Why sell if all you have to pay is a fine and a slab across the wrist for being a naughty foreigner?

I do notice there is a jail term applicable. But I can't imagine that being enforced.

A Chinese national (or any other national for that matter), being extradited from their own country to serve a sentence in Australia for purchasing outside the foreign ownership laws.

What a joke!!

 

I would believe the ATO and Government were serious, if they said that any owner in breach, had to sell the property for half the purchase price (50%) as a kind of punishment for breaking our law.

That would be a better deterrent, I bet.

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Who gets the money from the sale?

The owner??

What percentage does the government get from the sale? Normal stamp duty??

Why sell if all you have to pay is a fine and a slab across the wrist for being a naughty foreigner?

I do notice there is a jail term applicable. But I can't imagine that being enforced.

A Chinese national (or any other national for that matter), being extradited from their own country to serve a sentence in Australia for purchasing outside the foreign ownership laws.

What a joke!!

 

I would believe the ATO and Government were serious, if they said that any owner in breach, had to sell the property for half the purchase price (50%) as a kind of punishment for breaking our law.

That would be a better deterrent, I bet.

 

I thought the new/tougher laws kick in next month? Hopefully, whoever gets caught after that will get more than a slap in the wrist.

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Who gets the money from the sale?

The owner??

What percentage does the government get from the sale? Normal stamp duty??

There are fines up to $127k and investors could be forced to pay back any capital gains. What 'up to' and 'could' mean is unclear. A cobran is right there is an amnesty till the end of this month. 

 

http://www.smh.com.au/business/the-economy/ato-hunts-down-foreign-buyers-of-residential-property-breaking-the-law-20150508-ggwyx6.html

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Thank you cobran and zaph for setting me straight.

I didn't read the actual legislation. (Always a good idea - but time consuming).

Made my comments from a couple of online articles.

I hang my head in shame......

I'm an advocate against misinformation, so I need to take some of my own medicine.

Sorry if I misled anyone.

I hope this means that I can also now put more trust in my government to prosecute where necessary.

Thanks again guys.

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Hello ATO

 

link

 

 

...The biggest result of the day was the $7 million sale of a grand five-bedroom, five-bathroom house at 32 Wattle Street, Killara, which went to an  overseas Chinese buyer. “It was $650,000 over the reserve,”...

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