Stepping up pressure on foreigners suspected to have bought properties illegally, the Australian government has told buyers to come forward and disclose their unlawful transactions by November, or face three year jail terms plus whopping fines.
Under the new rules, foreigners who have bought properties illegally in Australia face fines of A$127,500 (US$100,050) and up to three years jail for individuals, and fines of more than A$637,500 (US$499,000) for companies.
Third parties such as real estate agents who knowingly assist a foreigner to breach the rules will be fined up to $42,500 (US$33,254) for individuals and $212,500 ($US166,230) for companies.
Abbott said foreigners were illegally buying into the existing residential property market and driving up prices.
“We want to ensure that locals are getting a fair go, that the playing field is at least level and, if possible, slightly tilted towards the locals,” he told reporters in Sydney recently.
Foreigners need to seek permission from Australia’s Foreign Investment Review Board (FIRB) before buying. They are not allowed to buy an established (previously occupied) house. They may buy an unoccupied new dwelling, but only if the FIRB feels that the purchase will not add to the shortage of properties available to native Australians. However, many foreigners are believed to have flouted these restrictions. Abbott said foreigners were illegally buying into the existing residential property market and driving up prices.
Treasurer Joe Hockey said the government was already investigating some 100 cases of illegal purchases. The Australian government has asked 55-year-old Hong Kong property developer Hui Ka Yan – the 15th wealthiest person in China – to sell a Point Piper mansion in Sydney within 90 days or face having it repossessed by the Commonwealth Department of Public Prosecutions.
This article was republished with permission from Global Property Guide.