Australia’s efforts in cracking down on overseas investors violating foreign investment rules on residential property is reaping results, with 195 of such cases currently under investigation, revealed the Foreign Investment Review Board (FIRB) and reported in the media.
This comes a month after the Australian government unveiled new penalties, such as prison terms of up to three years and hefty fines, as well as a temporary moratorium.
The heftier punishments are in response to expanding foreign investment in Australian real estate as well as evidence of abuse of foreign investment laws which prevent foreign buyers from acquiring existing homes.
In a statement, Treasurer Joe Hockey revealed that 24 of the 195 cases involve foreigners who voluntarily reported to the FIRB that they may have breached the rules.
Hockey also stated that 40 of the cases were the result of tip-offs from members of the public who were suspicious that homes were acquired using illegal leasing arrangements and shelf companies to hide foreign ownership.
“Foreign investors who think they may have broken the rules should come to us before we come to them,” he added.
Those who come forward before 30 November will be forced to sell the illegally acquired property, but will not face criminal prosecution.
In fact, Hockey has ordered the Chinese owner of a harbourside mansion in Sydney to sell the A$39 million property within 90 days as it was illegally purchased through a string of shelf companies.
Although foreign investors are prohibited from acquiring existing homes, Australia allows them to buy new homes and apartments in order to boost housing supply and spur investment.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
