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INTERNATIONAL - AUSTRALIA: Foreign investors to pay annual charge on vacant properties

The Australian Parliament has passed legislation to tighten the property tax rules for investors in residential property.

The Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 implements the following measures:

- an annual vacancy charge on foreign owners of residential real estate where the property is not occupied or genuinely available on the rental market for at least six months in a 12-month period. It applies to foreign persons who make a foreign investment application for residential property from 19:30 (AEST) on May 9, 2017 (Budget night);

- from July 1, 2017, travel costs for individual investors inspecting and maintaining residential investment properties will no longer be deductible. The aim is to prevent residential property investors from taking holidays at taxpayers' expense;

- a new limit on plant and equipment deductions to assets not previously removed, to remove existing opportunities for items to be depreciated by multiple owners in excess of their actual value.