Treasurer Joe Hockey has ordered the sale of five more residential properties unlawfully held by foreign investors, under his crackdown on illegal foreign property investment.
The properties in question are located in Perth, Sydney, Adelaide, Brisbane and the Gold Coast. The purchase prices of the properties range in value from $265,000 to $8.1 million.
According to a statement from the Treasurer, the foreign investors involved either purchased established property without Foreign Investment Review Board (FIRB) approval, or had approval but their circumstances changed meaning they were breaking the rules.
However, the investors linked to the five properties voluntarily came forward, taking advantage of the amnesty Hockey announced in May. This means they now have 12 months to sell the properties, rather than the normal three month period, and will not be referred for criminal prosecution.
According to Hockey, since transferring residential real estate compliance functions to the ATO in May, over 3,000 pieces of information relating to suspected breaches have come to light via data matching with third party sources, including FRIB, Immigration, AUSTRAC and state and territory land title offices.
There are now 481 cases under active investigation.
, Hockey ordered the sale of six residential properties illegally held by foreign investors – and he expects more to come.
“I expect more divestment orders will be announced in the future and once again warn foreign investors in residential real estate that they must comply with Australian law,” he said in a statement.
“Australia’s foreign investment policy for residential real estate is designed to increase Australia’s housing stock, but those who break the rules and purchase established property illegally are doing so to the detriment of all Australians.”
Last month, the Treasurer also introduced legislation into Parliament to ensure that the reporting requirements, enforcement and penalty regimes for foreign investors who break the rules are stricter and more significant. These laws were to be debated in the House of Representatives yesterday.
Under the amnesty announced by Hockey in May, foreign investors have until 30 November 2015 to voluntarily turn themselves in.
Brokers who deal with foreign investors should also be wary, as the government is set to amend the Foreign Acquisitions and Takeovers Act 1975
to introduce civil pecuniary penalties for third parties that knowingly assist foreign investors to breach foreign investment rules.