The Federal Government is cracking down on those who breach foreign investment rules by introducing increased jail terms and penalties.
Prime Minister Tony Abbott and Treasurer Joe Hockey made a joint announcement today saying that the Australian Taxation Office will now handle all residential real estate data which will enable it to alert the government of possible breaches more effectively.
Under the new penalties people found guilty of breaching foreign investment rules will face increased fines of $127,500 or three years imprisonment and up to $637,000 for companies.
Third parties which include developers and real estate agents will also bear the brunt of civil and criminal penalties with fines reaching up to $42,500 for individuals and $212,500 for companies.
The penalties will ensure that those who break foreign investment rules do not profit or receive any capital gains made on divestment of a property.
Foreign buyers will also have to pay a $5000 fee to buy property in Australia which will be used to fund the policing of the new rules.
“The Government will continue to welcome foreign investment, but the community must have confidence that this investment is coming in on our terms and for our nation’s benefit,” the joint statement said.
“There does need to be better enforcement of the rules for foreign purchases of existing homes so that young people are not priced out of the market.”
The news comes after the Foreign Investment Review Board showed the number of foreign investors has doubled since last year.
The Board approved 23,428 out of 23,430 applications from foreign investors — a 99.9% approval rate.
The reforms will come into effect on 1 December 2015.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.