AUSTRALIA: Government orders forced sales of properties illegally held by foreign nationals

Tuesday September 20 2016

The Australian Treasurer has ordered the divestment of a further 16 Australian residential properties that have been held by foreign nationals in breach of the foreign investment framework, taking the total purchase price of Australian residential real estate divested to over AUD $92 million.

The 16 properties were purchased in Victoria, New South Wales, Queensland and Western Australia with prices ranging from approximately AUD $200,000 to AUD $2 million. The individuals involved come from a range of countries including the United Kingdom, Malaysia, China and Canada.

The foreign investors either purchased established residential property without Foreign Investment Review Board approval, or had approval but their circumstances changed meaning they were breaking the rules.

Through information provided by the public, together with the ATO`s own enquiries, approximately 400 cases remain under active investigation.

Since a new penalty regime was introduced from 01 December 2015, 179 penalty notices have been issued, totalling over AUD $900,000. Penalty notices have been issued to people who have failed to obtain FIRB approval before buying property as well as for breaching a condition of previously approved applications.

Illegal real estate purchases by foreign citizens attract criminal penalties of up to AUD $135,000 or three years` imprisonment, or both for individuals; and up to AUD $675,000 for companies. The new rules also allow capital gains made on illegal investments to be forfeited.

Please click the link at the top of the page for more information.