Earlier in May this year, the Australian government announced it would enforce strict rules and increase penalties for illegal property purchases by foreign buyers.
Australian Treasurer Joe Hockey stated that the government would carry out a crackdown on foreigners who illegally own residential properties in the country, and investigate such cases before the introduction of tougher penalties on offenders. Six properties illegally owned by foreigners had been ordered to be sold off, but officials are working on hundreds more similar cases. He expects more divestment orders will be announced soon.
Foreigners, or non-residents of Australia, are only allowed to buy new dwellings or vacant land, and cannot purchase existing (established) residential property. Foreigners who illegally buy Australian real estate will face up to three years in jail or fines of A$127,500 (US$95,000) for individuals and A$637,500 for companies.
The price of Australian real estate has leaped in recent years, especially in Sydney and Melbourne, amid concerns that wealthy foreign investors, particularly from China, have helped inflate the property market. The majority of cases being investigated come from Sydney, Melbourne, and Western Australia.
Foreign investment in residential real estate has increased over the last few years. Australia welcomes foreign investment, but needs to make sure that the investors comply with the laws. New legislation would ensure that the reporting requirements, enforcement and penalty regimes for foreign investors who broke the rules are tougher.
So, if you’re planning to start investing in Australian property, make sure you’re doing it above board. Read our tips on how to do it the right way! 🙂
Source: Business Insider/AFP (link)