Foreign buyers forced to sell Australian real estate
Non-resident foreign persons generally need to apply for and receive foreign investment approval before purchasing any residential property in Australia.
Forced to sell Australian residential properties
Recently the Treasurer has ordered the forced sale of a further 15 Australian residential properties held by foreign nationals in breach of the foreign investment framework, taking the total number of forced sales to 61, with a combined value of $107 million.
The 15 latest properties are located in Victoria and Queensland, with a combined purchase price of more than $14 million. The foreign owners come from a range of countries including China, India, Indonesia, Iran, Malaysia, the United Kingdom and Germany.
A further 36 foreign nationals have sold properties during the course of Australian Taxation Office (ATO) investigations, showing improved compliance with the rules and a strengthening of the enforcement program.
The foreign nationals in the latest group of forced disposals purchased their properties without Foreign Investment Review Board (FIRB) approval and in some cases held multiple established properties in breach of the rules. The ATO identified these breaches through data matching programs as well as using information provided by the public.
The ATO has detected more than 570 foreign nationals who have breached the rules. This has resulted in forced sales, self-disposals, variations to previously approved FIRB applications and retrospective approvals with strict conditions. Breaches of these conditions will result in civil penalties or criminal prosecution.
Furthermore, the ATO has issued 388 penalty notices to foreign nationals in breach of the rules, attracting penalties of more than $2 million. Penalty notices have been issued to people who have failed to obtain FIRB approval before buying property as well as for breaching a condition of previously approved applications.
If you are in this position or have an associate who is in this position, please contact one of our tax lawyers on (02) 9223 9166 or submit an online enquiry form