Treasurer Joe Hockey has ordered the sale of six residential properties in Australia illegally purchased by foreign nationals.
The five investors, who currently lives in four different countries, have been ordered to sell their properties in the next 12 months instead of the normal three-month period.
“Some of the five investors have purchased property with Foreign Investment Review Board approval, but their circumstances have changed and they have failed to comply with the divestment requirements,” wrote Hockey in a statement today.
“Some have simply broken the rules by purchasing a property without approval and done so against the law.
Two properties are in Kewdale, Perth, another in Eight Mile Plains, Brisbane and the remaining three are in the Sydney suburbs of Eastwood, Fairfield and Mosman.
The properties range in value from $152,000 to $1.86 million.
“Time is running out for foreign investors to voluntarily come forward if they have illegally purchased existing residential real estate,” Hockey warned.
Earlier this year, Hockey forced one of China’s richest men to sell a $39 million Sydney harbourside mansion because the foreign-owned company that bought it failed to notify the Foreign Investment Review Board (FIRB) of the intended purchase.
It was the first time a treasurer has acted in such a fashion in eight years with the Foreign Acquisitions and Takeovers Act stating that non-resident foreign nationals cannot buy established dwellings as homes or investments and all foreigners require approval to buy residential real estate.
It’s part of the government’s broader crackdown on illegal foreign investment, with those who breach the rules facing increased fines of $127,500 or three years imprisonment and up to $637,000 for companies.
Since transferring responsibility to the Australian Taxation Office for residential real estate data in May, 462 cases have been under active investigation with over 2,000 pieces of information relating to suspected breaches uncovered through third party sources.
Hockey says he expects “more divestment orders will be announced in the not too distant future” warning “foreign investors in residential real estate that they must comply with Australian law”.
He will introduce legislation over the next two weeks to ensure that “reporting requirements, enforcement and penalty regimes for foreign investors who break the rules are stricter and more significant”.
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