The federal government of Australia ordered the sale of eight properties owned by foreigners over the breach of foreign investment rules. Treasurer Scott Morrison said the owners of the properties in Victoria, New South Wales and Queensland have one year to sell the properties, or they will face criminal prosecution.
The owners of the eight properties are from Canada, Malaysia, China, India and United States.
“The foreign investors either purchased established residential property without Foreign Investment Review Board approval or had approval but their circumstances changed, meaning they were breaking the rules,” the Guardian quoted Morrison as saying.
After the penalty period was reduced in mid-2015, the time limit allowed for selling off the properties was extended from three months to one year. More than 1,500 cases since then were raised for investigation, of which more than 800 are under active consideration.
Morrison said that although foreign investment is a vital part of the economy, it is necessary to ensure that foreign investors do not disregard the local rules.
“The Government’s transfer of responsibility to the ATO [Australian Tax Office] for compliance has enabled more active investigations and actions targeting illegitimate purchases,” the ABC quoted him as saying. “Since this transfer in May, over 1,500 matters have been referred for investigation. Through information provided by the public, together with the ATO’s own enquiries, over 800 cases remain under active investigation.”
The figures indicate that in the past five months, the numbers have increased effectively. Morrison said that the owners have 12 months to sell the properties. He added that the criminal penalties can go up to AU$135,000 or three years of imprisonment, or both. For companies, the penalties can be up to AU$675,000.
Foreign investors can purchase new properties but not homes that have already been established. The policy encourages building rental without abandoning the domestic buyers.