Australia put into force a robust new investment regime on Tuesday cracking down on foreigners who unlawfully own residential properties and tightening scrutiny on purchases of farmland from overseas.
The government announced in May its plan to fine, and even jail foreigners who flouted rules that only allow them to buy new dwellings, and not existing residential property.
Real estate prices have soared in recent years, particularly in Sydney and Melbourne, with concerns mounting that cashed-up foreigners, particularly from China, have helped inflate the market.
“The government welcomes foreign investment that is not contrary to our national interest,” said Treasurer Scott Morrison.
“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.”
Under the new regime, foreigners who illegally buy Australian real estate will face up to three years in jail or fines of Aus$135,500 (US$97,000) for individuals and Aus$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,” added 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.”
Fees will also be levied for the first time on foreign investment applications. Australia has also improved scrutiny and transparency around foreign ownership of agricultural production amid concerns about valuable assets passing into foreign hands.
