Australia introduced new investment rules yesterday aimed at cracking down on foreigners unlawfully owning residential properties and improving scrutiny on acquisitions of farmland from overseas, reported Reuters.
In May, the government unveiled plans to fine and even jail foreigners who violate rules allowing them to purchase new residential properties, and not existing homes.
Real estate prices have skyrocketed in recent years, especially in Melbourne and Sydney, with growing concerns that affluent foreigners, particularly those from China, have helped inflate the market.
“The government welcomes foreign investment that is not contrary to our national interest,” Treasurer Scott Morrison said. “Without foreign investment, production, employment and income would all be lower. But it is important that foreign investment is appropriately monitored to ensure that it benefits all Australians.”
The new regime will see foreigners illegally buying Australian real estate face up to three years imprisonment or fines of A$135,500 for individuals and A$675,000 for companies.
“New civil penalties supporting divestment orders and ensuring people who break the rules do not profit from their actions also come into effect,” noted Morrison.
“These include forfeiting any capital gains made on divestment of a property and fines for third parties who knowingly assist foreign investors to break the rules.
“Under these new arrangements foreign investors who fail to comply with the foreign investment rules will not be able to profit from doing so,” he added.
For the first time, fees on foreign investment applications will also be levied.
Australia also tightened scrutiny and transparency on foreign ownership of agricultural production amid concerns of valuable assets going into the hands of foreigners.
Morrison revealed that a new agricultural land foreign ownership register had been created with any attempt by a foreigner to take their cumulative farmland investment to over A$15 million (S$15.45 million) to be screened by the national regulator.
Previously, the Australian Foreign Investment Board only screened foreign investment for acquisition of agricultural land over A$252 million.
Direct interests in agribusinesses that are valued at A$55 million and above will also be sent to the Foreign Investment Review Board.
“While foreign investment in agriculture provides important economic benefits, we have acted to improve scrutiny and transparency around foreign ownership of Australia’s agricultural production,” said Morrison.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email firstname.lastname@example.org