New laws regulating property purchases by foreign investors have been introduced to Parliament by Treasurer Joe Hockey today and will ensure everybody plays by the rules.
The Foreign Acquisitions and Takeovers Legislation Amendment Bill grants more power to the Australian Tax Office (ATO), the Foreign Investment Review Board (FIRB) and the government when it comes to enforcing foreign investor rules.
Mr Hockey said foreign investment rules had not been significantly revised since their introduction 40 years ago.
Nor had they kept pace with changes in global investment.
Under the draft laws, penalties would be increased from $90,000 to $135,000 for serious breaches of residential real estate rules.
Real estate agents, migration agents, conveyancers and lawyers who knowingly assist a foreign investor in breaching the rules will now be subject to both civil and criminal penalties.
Three will be a “self-report” period between now and November 30, where those in breach of the investment rules can receive a reduced penalty. The new reforms should come into play from December 1.
Key elements of foreign investment reform package
- Criminal penalties for individuals are increased from $90,000 to a maximum $135,000 or three years imprisonment.
- Companies face penalties of up to $675,000.
- Real estate agents, migration agents, conveyancers and lawyers who knowingly assist a foreign investor in breaching the rules will face penalties.
- Foreign investors will pay a fee of $5000 for applications to buy residential and agricultural properties valued at $1 million or less in order to fund the cost of administering and enforcing the foreign investment regime. Higher fees apply for more expensive properties.
- A register of foreign-owned agricultural land will deliver better scrutiny and transparency.