'Luxury Defined' Global Report

Government Measures Impact International Housing Markets

Visas, taxes, and other regulations can open doors to international buyers or create barriers

Global gateway cities in nations with stable economies are increasingly challenged to manage international capital flows into and out of the luxury residential property sector. While the infusion of off-shore cash is a positive sales driver, the overall health of any market still relies on local homebuyers not being completely relegated to the sidelines. (See our annual rankings of the top performing luxury real estate markets worldwide).

Tax laws, visa requirements, and government measures all impact this delicate balance. As luxury housing in important pockets around the world heat up or cool down, we examine a selection of countries where government regulations have had significant impact in the past 12 months—from countries with open-door policies for overseas buyers to markets with barriers for international investment, as well as those countries that have implemented significant measures designed to cool an overheated property market. As part of Luxury Defined 2016, our annual report on the global prime property market, we present a snapshot of this current regulatory landscape.

Controlling Measures

Limiting the number of overseas buyers, not to mention the type of properties they may purchase, has long been the practice in Switzerland and more recently Australia. Despite the barriers, the importance of international wealth to these markets is still significant.

United States

Although the US is one of the friendliest countries for overseas real estate investment, the recent addition of measures to track allcash property purchases through shell companies may give privacy sensitive buyers pause. Treasury and federal law officials announced in January 2016 they will track all-cash sales above $3 million in New York, and above $1 million in Miami from March through August 2016. Officials may expand the timeframe and geographic coverage if the program is deemed a success.

Ron Shuffield of EWM Realty International in Miami, Florida says, “All-cash deals account for over 60 percent of home sales valued above $1 million in Miami. The new reporting regulations may impact some people who have nothing to hide, no criminal activity, but who value their privacy such as entertainers, athletes, and politicians who don’t want the whole world potentially camping out on their front step.”


One of the world’s most restrictive countries, Switzerland only permits overseas buyers to purchase a holiday or vacation home in tourist areas and only for “residential” purposes. Approvals from cantonal authorities, however, are difficult to come by and even once approved, the property is subjected to numerous restrictions, such as investment limit or property size.


International home-buying regulations are relatively strict in Australia: foreigners can only buy newly built properties that increase the overall housing stock, leaving existing housing inventory to local residents.

So as not to stem the flow of inbound wealth, in 2012 the government established a Significant Investor Visa for migrants who invest A$5 million in Australia over four years. Prime property has been a popular investment choice for the 91 percent of applicants who hail from mainland China. Last July, the government shifted the investment requirements towards higher-risk equities—at minimum 10 percent of the A$5 million must now go to approved venture capital funds and 30 percent to emerging small firms. There were only 47 applications in the six months following the change compared with as many as 50 applications per month under the old regime. Concurrently, the government stepped up its efforts to enforce overseas property buyer restrictions and to punish offenders who purchase existing homes.

Open Doors

Canada and New Zealand are leading examples of high-performing luxury housing markets that have instituted legislative changes for international buyers but continue to welcome overseas funds for housing.


Canada’s Immigrant Investor Program, which allowed foreigners to obtain residency by loaning C$800,000 interest-free to the government for five years, was cancelled in February 2014. Of the 59,000 pending applications, 76 percent were from mainland Chinese investors. The move did not, however, dampen the country’s luxury housing markets if Toronto is any indication. The city posted 25 straight months of sales growth and surpassed the C$1 million average price mark for the first time last September. Affluent overseas buyers, many from China, continue to be drawn by the city’s abundance of new construction and home prices that are lower than many other global economic hubs. Overall household formation supported price increases and sales pace with over 100,000 new households being formed in 2015 and 2016 showing no signs of slowing down.

New Zealand

A strong economy, magnificent natural beauty, and a friendly image are key selling points for New Zealand’s foreign real estate buyers. Add to that the country’s property laws—which do not include a stamp duty, capital gains tax, or visa requirements—and the result is one of the world’s most attractive property markets for overseas buyers. Though the country maintains an “open-door” housing policy, the government introduced measures to curb speculation in Auckland’s booming housing market last year. These include a levy on properties purchased and re-sold within two years (excluding inherited or primary residences) and a requirement for non-resident overseas buyers to apply for a government identification number for tax purposes; over 1,000 foreigners applied in the first three months of 2016.

Barriers to Buying

What happens when regulations over-cool a once hot market? Some loosen restrictions while others stay the course. France, China, Singapore, and Hong Kong have experienced wildly different impacts from cooling measures introduced in recent years by local governments.


Shuttle back to 2006, when China coped with a hot market and imposed restrictions on overseas buyers to prevent speculation and protect local buyers. Now, with the nation’s economy slowing, international investment in the real estate sector fell by almost 25 percent in 2015 and the homebuying restrictions are being reversed. International homebuyers will no longer need to work or study in China for a year before becoming eligible to purchase residential real estate. Foreigners may now purchase more than one property, subject to local restrictions; both Beijing and Shanghai still adhere to the one-property rule.


Along with other macroeconomic developments, changes to France’s tax laws have impacted the country’s luxury real estate landscape. Most notably, President François Hollande’s 2012 taxation measures, including a 75 percent tax rate on earnings above above €1 million were removed by the French Constitutional Court in 2014. This alternation of the tax code was a positive development for the French property market, as it alleviated concerns by prospective buyers and encouraged them to take advantage of favorable market conditions. Low mortgage rates and a relatively weak euro spurred growth in the market last year, and with prices down 15 percent from their peak, demand for French luxury properties should continue.

Jean-Christophe Thouait of Michaël Zingraf Real Estate in Côte d’Azur states, “We are experiencing an interesting tax climate for non-residents. Since the social charges of 15.5 percent to be paid on real estate purchases were dropped in late 2014, we have begun to see increased interest in prime properties from a variety of nationalities.”

Singapore and Hong Kong

Both Singapore and Hong Kong have demonstrated continued commitment to their cooling measures. In October, Singapore’s National Development Minister Lawrence Wong indicated that market-stabilizing measures would remain in place in order to prevent a “premature market rebound.” Similarly in January, Hong Kong’s housing minister promised to maintain measures that discourage property speculation despite falling home prices.

Says Samuel Eyo of Singapore-Christie’s International Real Estate in Singapore, “For buyers to pay S$51 million and an additional buyer’s stamp duty of 15 percent if he or she is a foreigner, or at least 5 percent if a permanent resident, reflects general buyer confidence about prospects for Singapore’s luxury condo market.”