A new Treasury consultation paper has recommended changing the way residential land used for an aged care facility, retirement village or student accommodation is treated. It proposes reclassifying these sites as ‘non-vacant commercial land’ and raising the Foreign Investment Regulation Board (FIRB) screening threshold from zero to $55M.
All investors, including foreign government investors, would also be exempt from notifying the FIRB when they made purchases as the operator of a facility with a mandatory buyback scheme.
This would cut the “regulatory burden” for straightforward commercial transactions, removing around 10 cases and saving around $300K a year.
Julius Wei from investment group BMY Group told the Fin Review that foreign investment into the village and aged care sectors “should be welcomed”.
But he said the rules needed to encourage foreign investors to invest for profit rather than capital gain to prevent a jump in prices. “Capital gains [in these sectors]should be taxed heavily,” he said.