Australia’s foreign investment laws allow and welcome investor’s to invest in Australian property, but only brand new property - that is, property that is purchased off the plan or property that has never had an owner. Back in May 2015, the Australian Taxation Office (ATO) was instructed to take greater focus on tax evasion by non-residents. This included foreign owned companies operating in Australia through to property investors.  However the ATO was also to take on more power with regards to enforcing the foreign investment rules, in relation to property. “Foreign investment is integral to Australia’s economy, it is important to uphold the integrity of the framework and ensure that foreign investment is not contrary to our national interest”, the then Treasurer Joe Hockey, is quoted as saying back in June 2015. 

The Foreign Investment Review Board (FIRB) had already been actively considering the impact of any foreign investment proposals on tax revenues, however during the ATO’s first month of engagement, 195 suspected breaches were identified, against 24 individuals. This was then followed up in August, with the former Treasurer ordering 6 residential properties unlawfully held by foreign nationals, to be sold. “The ATO’s data matching program is already getting results. For example, they have identified one foreign investor who appears to be linked to over 10 properties ranging from a $300,000 unit to a house worth $1.4 million” Joe Hockey said.

But the news get’s better, this week, data shows another 125 foreign investors have voluntarily taken advantage of the amnesty period offered by the Australian government for either intentional or accidental braches of the law.  The deadline for the amnesty period is 30 November 2015, with any subsequent breaches found, will find the investor having to sell the property/properties. From 1 December 2015, foreign residents who unlawfully purchase established residential property will face increased criminal penalties up to $127,500 or three years imprisonment for individuals and up to $637,500 for companies. The 125 volunteers were foreign nationals from Singapore, Indonesia, the UK and China.

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Author

  1. avatar
    Sarah Rollings