The Coalition Government today announced that it is taking action to strengthen the integrity of our foreign investment framework.
The Government recognises that foreign capital is vital to help grow our economy and provide jobs. In the case of residential real estate, the current foreign investment regime aims to channel foreign investment into new homes for Australians to purchase or rent.
The Government’s changes will ensure that this aim is fulfilled, and that the current rules that prohibit non-resident foreign investors from purchasing existing homes is enforced.
As the former Chairman of the House Standing Committee on Economics, I am delighted that the Government has accepted all of the Committee’s recommendations.
Today’s announcement includes:
- stronger enforcement of the existing rules by transferring responsibility for foreign investment residential applications from the Foreign Investment Review Board (FIRB) to the Australian Taxation Office (ATO);
- stronger criminal penalties for those who breach the rules – including higher fines and terms of imprisonment;
- new civil penalties to ensure that those who breach the rules do not profit from their illegal purchase;
- new civil and criminal penalties for third parties who knowingly assist a foreign investor to breach the rules;
- application fees to ensure that Australian taxpayers no longer have to fund the cost of administering the framework;
- increased transparency on the levels of foreign investment in Australia through the establishment of a national land register; and
- a modernisation and simplification of the foreign investment framework – the most significant overhaul of the system in 40 years.
The Government also announced that as from Monday 4 May 2015, the ATO will be responsible for the residential real estate functions of the foreign investment framework – including audit, compliance and enforcement activities. This new unit has sophisticated data matching technology that will use existing ATO data, and will match this information against other datasets held by the Department of Border Protection and Immigration, the Australian Transaction Reports and Analysis Centre (AUSTRAC), amongst others.
In addition, the ATO will be issuing letters to individuals and companies suspected to be involved in breaches of the foreign investment framework. It will also conduct investigations of property sales reported to them by the public, along with random audits of properties that have been sold over the past 10 years.
Those in breach of the foreign investment framework will have from today until 30 November 2015 to self-report their breach and be given a longer period of time to divest the illegally purchased property before the new rules come into effect from 1 December 2015. The ATO will pursue breaches against foreign investors who do not voluntarily come forward.
To find out more about today’s announcement click here.
Kelly O'Dwyer, Federal Member for Higgins
Parliamentary Secretary for Federal Treasurer
Comments
Anonymous (not verified)
Sun, 2015-05-03 09:26
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Pure political spin
limits to growth (not verified)
Thu, 2015-05-07 16:34
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Chinese to buy $60bn in Australian housing
Chinese investors and immigrants purchased more than $8 billion in Australian residential property in the space of 12 months, with growing demand forecast to pump another $60 billion into the market over the next six years. The number of first home buyers are dwindling, and thus our borders must be opened up to keep the Ponzi housing bubble inflated!
The Chinese money pumped into Australian housing was the equivalent of 15 per cent of national housing supply.
"We expect $60 billion of additional Chinese demand for Aussie housing over the next six years to 2020. This will be more than double the $28 billion over the past six years," according to a Credit Suisse analysis. The proposed new foreign investment rules may make Australian real estate less attractive for Chinese buyers, but that "the potential erosion of demand will be marginal". So, with all these cashed up property investors, extra tax is hardly a disincentive! This foreign-buy ups will be supported and accompanied by 2% new settler rates from China, while it was assumed the "investment" flows from Chinese buyers would grow at a rate of five per cent per annum. Living in this housing bubble is meant to bring great wealth for Australia? It's aimed at investors, not average Australians trying to buy into unaffordable housing.
The Australian: Chinese to buy 60bn in Australian housing
Baby boomers grew up with the assumption that if they had a full-time job, they could afford to buy a house –and pay it off in their working life. It was a hallmark of the egalitarian society Australians are so fond of remembering.
We had a lifestyle to be envied by the world. Thanks to high population growth, and tax benefits to favour investors, we have a working poor population that will never be able to afford to buy a house, flat or fibro shack in the ‘burbs. Malaysia and Thailand allow Australians to buy freehold property, but few other countries!
Nick F. (not verified)
Mon, 2015-05-11 01:52
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Protest foreign property buyers Chinese Consul May 30
Sheila Newman
Mon, 2015-05-11 02:38
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China's $60 billion Australian property splurge
One could make some academic criticism of the above post for not mentioning the large number of British, Irish, Indian and other buyers, but that would be hair-splitting. One must concede the overall case: it is obvious that the property industry is focusing on certain buyer groups and Chinese buyers are a noticable target, and the origin of such vast streams of money that Australian citizens are increasingly disadvantaged. They cannot compete and why should they? Australians have been conditioned - by a variety of stretched interpretations of multiculturalism - to fear punishment (ostracism) if they identify any particular ethnic group for anything but praise, yet how can one expect struggling Australians to stand mutely by when the mainstream media daily focuses on the cash or investment value of this or that ethnic group, and lately particularly on the Chinese, with this kind of announcement: "Chinese investors and immigrants purchased more than $8 billion in Australian residential property in the space of 12 months, with growing demand forecast to pump another $60 billion into the market over the next six years." (Sydney Morning Herald Business Day, May 17 2015.
To many this is catastrophic news.
There is a real problem in selling off our land and resources and in growing our population. Not only have the Australian public not been asked, but these policies are creating debt and dispossession. For this reason Nick Folkes's demonstration seems aptly focused.
It is very unfortunate that State and Federal Governments have allowed Australia's population growth and foreign investment situation to become so extreme that people feel they must protest outside consulats, but the situation is extreme.
More discussion welcome.
admin
Mon, 2015-05-11 02:52
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Buyout morally indistinguishable to indigenous dispossession
Thank you, Nick for drawing our attention to this scam. The government and the selfish vested interests they represent are treating this generation of Australians no better than the indigenous Australians who were dispossessed before us. If they get away with this, the habitable territory on this continent will, in the not-too-distant future, be turned into a huge crowded urban slum.
Any state or Federal government that had the interests of today's native Australians at heart would have acted by now to end the selling off of our housing. They clearly do not represent us.
Nick F. (not verified)
Fri, 2015-05-22 22:39
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'Stop Chinese real-estate-invasion' flyer drop help needed
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