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TODAY'S OTHER NEWS

Foreign property investors hit hard in Australian budget

International property investors have been hit by a number of measures in the budget in Australia this week in a bid to level the playing field between domestic homeowners and foreign investors.

The Australian government is hoping to deter many international investors from investing in the country’s housing market in an effort to stop prices spiralling out of control and help support first-time buyers in their efforts to get a foot on the housing ladder.

Residential investors, especially those who have purchased interstate property, have been hit hardest.

Until now investors could claim a tax deduction on travel costs when visiting a property they owned, while there has been no limit to the number of times an owner could visit each year.

But from 1 July this year, tax deductions relating to expenses incurred while visiting properties in Australia will be completely scrapped.

The government forecasts that it will claw back in the region of AUS$540m (£308m) from the measure.

There will also be a tightening of depreciation deductions for investment properties, including a plan to no longer permit subsequent owners of a property to claim deductions on items purchased by the previous owners of the property.

The government is also planning to impose a 50% limit on foreign ownership in new property developments, which the government sees as a way of ‘increasing the housing stock for Australian purchasers’. 

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