Australia warns rogue foreigners on purchasing homes

They are helping fuel an enormous property bubble in Sydney and Melbourne and many are now being probed.

CANBERRA: Australia has warned foreign investors who may have bent the rules on residential real estate to come forward now or face jail later.

Treasurer Joe Hockey announced today that the Foreign Investment Review Board (FIRB) was probing 195 cases of foreign investment rule breaches on residential real estate, including 40 where suspicious neighbours had informed authorities, Xinhua news agency reported.

The widened investigation comes as concerns mount that rogue foreign investors are helping fuel an enormous property bubble in the country’s two largest cities Sydney and Melbourne.

The government announced last month it would crack down on shady investors and uphold foreign investment laws that prohibit them from purchasing existing residential real estate. Foreign investors may still purchase new homes.

When the grace period ends from December 1, foreign residents who unlawfully purchase established property face criminal penalties of up to US$98,000 or three years’ jail. Companies face fines of almost US$500,000.

“Foreign investors who think they may have broken the rules should come to us before we come to them,” Hockey said in a statement.

“They will still be forced to sell the properties, but will not be referred for criminal prosecution if they voluntarily come forward before November 30.”

Hockey said the Australian Tax Office (ATO) had the ability to cross-refer its own data with that of the FIRB, Immigration, the Australian Transaction Reports and Analysis Centre and state and territory titles offices.

Of the 195 cases now open, 24 foreign investors had voluntarily come forward to identify they may have breached the law.

Another 40 cases were initiated upon evidence from neighbours who suspected foreign investors may have broken the rules by using complex structures and illegal leasing arrangements to hide foreign ownership.

– BERNAMA