North western rural real estate agents feel reassured by the Federal Government’s decision to tighten regulations around the purchase of farm land by foreign companies.
Yesterday the government announced it would reduce the screening threshold for foreign purchases from $252 million to $15 million as of March 1.
The new $15 million screening threshold will apply to the cumulative value of agricultural land owned by the foreign investor, including the purposed purchase.
The Government also announced the establishment of a foreign ownership register of agricultural land to strengthen reporting requirements and provide a clear picture of foreign investment in Australia’s agricultural sector.
From July 1 the Australian Tax Office (ATO) will start collecting information on all new foreign investment in agricultural land regardless of value.
The ATO will also commence a stocktake of existing agricultural land ownership by foreign interests.
The government argues it will continue to welcome foreign investment, but that the purchases must be made on Australia’s terms and for the benefit of the nation.
“These measures are a significant step in protecting Australia’s national interests and in giving the community greater confidence in our foreign investment regime,” the Prime Minister’s press release reads.
“Foreign investment always has, and will continue to be, integral to Australia’s economic success.”
Local rural property agent Michael Guest believes the announcement is a positive step.
“I am concerned that the magnitude of foreign investment in our agricultural property sector is having a significant detrimental effect on the Australian economy and taxation system,” he said.
“I welcome the closer scrutiny of foreign investment in agricultural land.”
Mr Guest added that he did hold some reservations around how the changes would affect the market.
“The revised cumulative threshold level of $15 million may hinder competition in the rural property marketplace,” he said.
Mr Guest also believes the laws in relation to foreign ownership in residential real estate should be enforced.
The Government is currently considering the recommendations of the Parliamentary Committee inquiry led by Kelly O’Dwyer MP regarding foreign investment in residential real estate.
“There does need to be better enforcement of the rules for foreign purchases of existing homes so that young people are not priced out of the market,” a spokesperson said.
The Government will announce details of the reforms to foreign investment in residential real estate in coming weeks.