The Prime Minister has ordered a crackdown on foreign property investors, and those who aid them, who are bending the rules and allegedly pushing up house prices.
Regulation guiding foreign property investors states that non-residents can only purchase new dwellings while temporary residents can purchase one established home to use as their residence while living in Australia, provided it is sold once vacated.
However, a parliamentary inquiry into foreign investment in residential real estate conducted last year found that no prosecutions have taken place for illegal purchases since 2006.
Now, Prime Minister Tony Abbott has told The Daily Telegraph
that an elite audit and compliance unit of the Commonwealth Treasury has been tasked with finding illegal investments and forcing immediate sales.
“If it comes to our attention that someone has bought a property that they are not legally entitled to buy then our intention is issue divestment notices,” the PM told The Daily Telegraph
“In the next couple of weeks you can expect to see more from us in regards to residential land. We want housing to be affordable ... we appreciate that if there is illegal competition that is obviously going to make it much more difficult.”
Recommendations from the parliamentary inquiry chaired by Liberal MP Kelly O. Dwyer will go to Cabinet within the next two weeks.
Recommendations include that a civil penalty regime should be introduced for breaches of regulation, along with tougher ramifications – making it easier to prosecute the rule breakers while also being a harsher deterrent.
The report has also recommended that third parties – such as real estate agents, lawyers, accountants and brokers – who knowingly assist a foreign investor to breach the framework should also be subject to a civil and criminal penalty.
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