With the Australian Treasury currently investigating 195 cases involving possible property law infringements, overseas buyers and investors need to ensure their investment complies with all current law and legislation.
Whilst declining to comment specifically on the 195 individual cases, a spokesperson from the Australian Treasury in a statement welcomed PropertyGuru Group’s interest to educate investors Southeast Asia.
The spokesperson confirmed: “Under Australia’s foreign investment framework, foreign persons must seek approval from the Government before purchasing residential real estate in Australia. Non-resident foreign persons are prohibited from buying existing dwellings in Australia.
“Non-residents seeking to invest in residential real estate can only do so by adding to housing supply and construction activity (for example, by purchasing new housing or developing vacant land).”
The spokesperson confirmed that a temporary resident is a person who is residing in Australia and holds a temporary visa that permits them to stay in Australia for a continuous period of more than 12 months (regardless of how long remains on the visa). The person may also have submitted an application for permanent residency and holds a bridging visa that permits them to stay in Australia until that application has been finalised.
“Temporary residents are allowed to buy one established house to use as their residence while they live in Australia, but this must be sold when they leave. Temporary residents cannot buy established dwellings as investment properties, but they are allowed to build or buy new houses.”
On May 2 this year, the Australian Government announced changes to strengthen the foreign investment framework. As part of the changes, the Australian Taxation Office (ATO) will be responsible for the residential real estate functions of the foreign investment framework – including audit, compliance and enforcement activities.
The Government announced a reduced penalty period for foreign investors who voluntarily disclose possible breaches of Australia’s foreign investment rules for residential real estate.
The disclosure period is effective from May 2 and ends on November 30, 2015.
Depending on individual circumstances, investors who voluntarily come forward may be given twelve months to divest, rather than a shorter period determined by the Treasurer, and may not be referred to the Commonwealth Director of Public Prosecutions for criminal prosecution.
More details on Australian foreign buying property investment compliance from here.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
