Melbourne : The Federal Government’s robust foreign investment rules and enhanced compliance program have enabled the Treasurer to order foreign nationals to sell a further seven Australian residential properties held in breach of the foreign investment framework.
Scott Morrison, Treasurer of the Commonwealth of Australia said, ‘These forced sales demonstrate that the Coalition Government’s strengthened foreign investment framework is ensuring that foreign nationals who are illegally holding Australian property will not be allowed to get away with it. Whilst we recognize the benefits that foreign investment can provide for Australia, we must also ensure that such investment benefits all Australians, conforms to our rules and is not contrary to our national interest. The seven residential properties are located across Victoria, New South Wales and Queensland. Their purchase prices ranged from $154,000 in Bellingen, NSW to more than $5 million for a house in the Melbourne suburb of Hawthorn East. The Hawthorn East property was found to have been bought without government approval following an Australian Taxation Office (ATO) investigation. The property is the first such house to be detected by the newly established ATO foreign investment task force which has sophisticated data matching capabilities. This divestment shows that the Coalition Government’s increased compliance measures, which critically include transferring responsibility for residential real estate enforcement to the ATO, are working. Australians for the first time in a long time can be reassured our foreign investment rules are being enforced.’
Referring to the other type of property deals, Morrison said, other existing residential property purchases had been initially compliant but were subsequently held in breach of the foreign investment rules as a result of changed circumstances, and shall also be divested. For instance, where a temporary resident entitled to acquire Australian residential real estate becomes a foreign resident, they shall no longer be entitled to hold Australian property and must divest after their circumstances have changed.He added, an order for a commercial property has also been made under the Foreign Acquisitions and Takeovers Act 1975 preventing a foreign person acquiring an interest in Australian commercial land. The proposed purchase of the property in the Melbourne suburb of Canterbury by an Iranian national was ruled contrary to Australia’s national interest. This brings to 19 the number of properties the Coalition Government has already forced foreign nationals to dispose of since taking office in 2013.
On the government’s stand on this aspect, Treasurer stated — The Government’s transfer of responsibility to the ATO for compliance has enabled more active investigations and actions targeting illegitimate purchases. Since this transfer in May, over 1,044 matters have been investigated. Through information provided by the public, together with our own inquiries, we now have 532 cases under active investigation. I expect more divestment will be announced in the future and once again warn foreign investors in residential real estate that they must comply with Australian law. Under the reduced penalty period announced by the Government in May, the purchasers linked to the seven properties now have 12 months to sell, rather than the normal three month period, and will not be referred for criminal prosecution.
Taking into account the deadline for disclosures, Morrison clarified, time is running out for foreign investors to voluntarily come forward if they have purchased established residential real estate without notifying the Foreign Investment Review Board. They have until 30 November 2015 to come to us before we come to them. Australia welcomes foreign investment but at all times foreign investors must comply with our laws. The Turnbull Government’s strong policies on combating non-compliant foreign investment include legislation currently before the Senate that will further ensure those who break the rules, or assist others to break the rules, are adequately detected and punished. These Bills will provide an even greater compliance regime so that Australians can have confidence their interests are being protected when it comes to foreign resident property purchasers.