New reforms that will see increased penalties for those who aid illegal foreign investment have been applauded by a major real estate association.
New legislation introduced into federal parliament by treasurer Joe Hockey last Thursday will see penalties increased from $90,000 to $135,000 for serious breaches of real estate rules.
In welcoming this policy change, REINSW president Malcolm Gunning said he believes that most foreign investors don’t intentionally break the law, but instead rely on incorrect advice.
“The previous fines were not significant and these increases will act as a disincentive,” he said.
“Most foreign investors don’t come into Australia with the intention of breaking the law. They tend to seek advice from someone who they have been referred to who speaks their native tongue and this is where the problem lies because they are often taken advantage of and given incorrect advice.”
Gunning says the REINSW International Chapter has been alerted that many foreign investors are actually being told by advisers to buy a property first and them make an application to FIRB second.
REINSW is also applauding other reforms to tackle illegal foreign investment in Australian real estate.
“A major issue with foreign investment in the past was due to inadequate policing. We welcome the fee of $5,000 for properties valued at $1 million or less and higher fees to more expensive residential and agricultural properties as well as commercial real estate and business applications,” Gunning said.
“We support new compliance powers granted to the Australian Taxation Office, which we believe is the appropriate place to find such transactions, and additional powers to the Foreign Investment Review Board.”