Properties illegally held by foreigners need to be sold
The Federal Government has ordered a further 16 forced sales of Australian residential properties that have been held by foreign nationals in breach of the foreign investment framework.
The aforementioned properties, which were purchased in four states with prices ranging from $200,000 and $2 million and with a combined value of over $14 million, were held by individuals from the United Kingdom, Malaysia, China and Canada.
Federal Treasurer, Scott Morrison, said that these divestments represented the government's efforts to identify the foreign nationals illegally holding Australian properties and to subsequently relinquish their illegal holdings.
The total purchase price of divested Australian real estate was currently expected to amount to over $92 million.
According to the Treasurer, the Coalition Government had forced foreign nationals to divest a total of 46 properties since it took office in 2013. He stressed that under Labour government no foreigners were forced to sell their illegally held real estate.
Also, in addition to divestments, a number of people came forward during the reduced penalty period who were not in breach, and some voluntarily sold their properties while the Australian Taxation Office (ATO) was examining their case. This included at least 25 examples of foreign investors self-divesting in this way.
"These divestments are a reminder that the Coalition Government‘s increased compliance measures, which include transferring responsibility for residential real estate enforcement to the ATO, are working to ensure our foreign investment rules are being enforced," Morrison said.
"Foreign investment provides significant benefits for Australia but we must also ensure that such investment benefits all Australians, is in-line with our rules and is not contrary to our national interest.
"While Australia welcomes foreign investment, foreign investors must comply with our laws."
Under the current law, illegal real estate purchases by foreign citizens could incur penalties of up to $135,000 or three years' imprisonment, or both for individuals, and up to $675,000 for companies.
The new rules also allow capital gains made on illegal investments to be forfeited.
AUTHOR
Oksana Patron
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
