The Australian government has ordered the sale of 8 properties owned by foreign buyers, over a breach of foreign investment rules.
Treasurer Scott Morrison said the established properties were either purchased without Foreign Investment Review Board approval, or had gained approval for the purchase but their circumstances changed, thus breaking the rules. The owners of the properties declared illegal have been given one year to sell them, or face criminal prosecution.
Recap: In May 2015, the Australian government announced that it would enforce strict rules and impose higher penalties for illegal property purchases by foreigners. Then in October 2015, it was announced that authorities were carrying out a crackdown on illegal residential purchases by foreign buyers, with 6 properties being ordered to be sold off and hundreds more similar cases in the pipeline. In Australia, foreign investors can only purchase new properties, and not established (existing) property.
One of the properties, a house in Melbourne’s southeast Mount Waverly, was sold for A$6 million following a government finding that the purchase was in breach of foreign investment rules. The other seven (less luxurious) properties include homes in Queensland, Melbourne, and Windsor, ranging from A$250,000 to A$780,000.
The eight properties bring the total number of homes declared illegally bought to 27. Most of the buyers are reported to be Chinese nationals, along with buyers from Malaysia, Taiwan, Canada, India and the United States.
The eight homes are among the last batch put to market by owners who participated in the amnesty period between May and November last year. As a result, they were given a year to dispose of their properties and not referred for prosecution. Those found to have breached foreign property investment rules will now be subject to criminal penalties of A$135,000 or three years jail or both (for individuals), and up to A$675,000 for companies. There will also be a new application fee for foreign buyers to enable the tax office to better monitor property purchases from non-citizens.
Interested in Australian property? There’s no need to worry about ownership or taxes when you deal with our trusted Perth-based partner, Handle Property Group (HPG). Discover Australian property now and you’ll even get 4 years rental return guarantee – an exclusive deal available only via Estate123.com!