foreign investment in Australia

The Coalition Government today announced that it is taking action to strengthen the integrity of our foreign investment framework.

The Government recognises that foreign capital is vital to help grow our economy and provide jobs. In the case of residential real estate, the current foreign investment regime aims to channel foreign investment into new homes for Australians to purchase or rent.

The Government’s changes will ensure that this aim is fulfilled, and that the current rules that prohibit non-resident foreign investors from purchasing existing homes is enforced.

As the former Chairman of the House Standing Committee on Economics, I am delighted that the Government has accepted all of the Committee’s recommendations.

Today’s announcement includes:

- stronger enforcement of the existing rules by transferring responsibility for foreign investment residential applications from the Foreign Investment Review Board (FIRB) to the Australian Taxation Office (ATO);
- stronger criminal penalties for those who breach the rules – including higher fines and terms of imprisonment;
- new civil penalties to ensure that those who breach the rules do not profit from their illegal purchase;
- new civil and criminal penalties for third parties who knowingly assist a foreign investor to breach the rules;
- application fees to ensure that Australian taxpayers no longer have to fund the cost of administering the framework;
- increased transparency on the levels of foreign investment in Australia through the establishment of a national land register; and
- a modernisation and simplification of the foreign investment framework – the most significant overhaul of the system in 40 years.

The Government also announced that as from Monday 4 May 2015, the ATO will be responsible for the residential real estate functions of the foreign investment framework – including audit, compliance and enforcement activities. This new unit has sophisticated data matching technology that will use existing ATO data, and will match this information against other datasets held by the Department of Border Protection and Immigration, the Australian Transaction Reports and Analysis Centre (AUSTRAC), amongst others.

In addition, the ATO will be issuing letters to individuals and companies suspected to be involved in breaches of the foreign investment framework. It will also conduct investigations of property sales reported to them by the public, along with random audits of properties that have been sold over the past 10 years.

Those in breach of the foreign investment framework will have from today until 30 November 2015 to self-report their breach and be given a longer period of time to divest the illegally purchased property before the new rules come into effect from 1 December 2015. The ATO will pursue breaches against foreign investors who do not voluntarily come forward.

To find out more about today’s announcement click here.

Kelly O'Dwyer, Federal Member for Higgins
Parliamentary Secretary for Federal Treasurer