Tougher financial penalties now apply with the introduction of strict new rules around foreign property investment in Australia, according to a recent article in The Sydney Morning Herald.
The Australian Taxation Office is now in charge of overseeing foreign residential property investment, with 50 compliance officers charged with investigating potential breaches of the law.
According to the article, Treasurer Scott Morrison said that as of December 2, 2015, foreign property investors would be more closely monitored and stricter rules were now in force for foreign investors who don’t get approval before buying property in Australia.
In general, non-resident foreigners are limited to buying new property in Australia, but without permission, they face large fines.
“Existing criminal penalties have been increased to $135,000 or three years imprisonment, or both for individuals,” Treasurer Morrison said.
Previously, individuals dodging the rules faced a maximum penalty of $90,000.
Companies violating the rules will now face fines of up to $675,000.
The same imprisonment time and fines apply to temporary residents, such as international students, who don’t seek approval before buying an established property.
Generally temporary residents are allowed to buy an established property to be used as their place of residence in Australia, but approval is still required.
Foreign applicants wanting to buy a residential property will now have to pay an application fee of $5000 for properties under $1 million, and $10,000 per million for properties valued over $1 million.
Property developers and third parties also face strict punishments for breaching foreign property investment rules.
Individuals, including buyers advocates and real estate agents, who help foreign investors breach property rules face fines of up to $45,000 while companies could be fined up to $225,000.
Property developers who fail to market apartments in Australia face a maximum fine of $135,000 or three years’ imprisonment.