A new penalty regime targeting foreign investors in Australia has seen 500 overseas property buyers issued with penalty notices and told to pay the Australian Taxation Office A$2.7 million (US$2 million) in fines.
The majority of breaches occurred in the states of Victoria, New South Wales, Queensland and Western Australia.
The federal government in December 2015 introduced a range of new penalties for foreign investors, including new civil penalties supporting divestment orders, fines for third parties who knowingly assisted foreign investors to break the rules and fees for foreign investment applications.
Photo: AFP
The Australian Taxation Office confirmed yesterday that since then, 500 penalties were issued for 700 offenses, including failing to get Foreign Investment Review Board approval before buying.
Penalties were also issued to those who breached a condition of previously approved applications, for example temporary residents failing to sell their properties once their visa expired.
Australian Treasurer Scott Morrison also approved the required sale of 61 foreign-owned properties, worth more than A$107 million.
“Additional matters are currently in contemplation and due for approval shortly,” the taxation office said in a statement.
Some of the breaches arose from investors coming forward during the reduced penalty period, the statement said.
While figures change frequently as investigations conclude, the latest data shows 60 percent of overseas buyers investigated were granted retrospective approvals — where the investor did not apply to the review board before purchasing, but would otherwise have received approval.
However, retrospective approvals come with strict conditions, with breaches resulting in civil penalties or criminal prosecution.
Overall, 20 percent of the properties and offenses investigated resulted in a required sale or self-divestment.
Other examples of offenses include temporary resident visa holders owning more than one property, Australian companies controlled by foreigners owning multiple established properties, and failing to commence construction on vacant land or for redevelopments within conditional time frames.
The findings are expected to be included in the review board’s annual report, which is due for release imminently.
A spokeswoman for Morrison said that the government was “committed to enforcing our rules so that foreign nationals illegally holding Australian property are identified and their illegal holdings relinquished.”
“The government’s policy to channel foreign investment into new dwellings creates additional jobs in the construction industry, increases housing supply and supports economic growth,” she said.
The Coalition has been discussing possible solutions to housing affordability, which is expected to be central to the budget being released in five weeks.
Australian Minister for Immigration and Border Protection Peter Dutton yesterday told Sky News that the government was considering encouraging migrant workers to settle in regional cities and away from property hot-spots.
“There are ways we are looking at that we might be able to provide support to people to choose a regional city,” he said.
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