Scott said: “The foreign investors either purchased established residential property without Foreign Investment Review Board approval, or had approval but their circumstances changed meaning they were breaking the rules.”
The Government transferred responsibility to the Australian Taxation Office (ATO) for compliance in May 2015. Currently over 2,200 matters have been referred for investigation and about 400 cases remain under active investigation.
Since a new penalty regime was introduced from 1 December last year, 179 penalty notices have been issued, totaling over $900,000. Illegal real estate purchases by foreign citizens attract criminal penalties of up to $135,000 or three years' imprisonment, or both for individuals; and up to $675,000 for companies. The new rules also allow capital gains made on illegal investments to be forfeited.
Scott added: “In addition to divestments, a number of people came forward during the reduced penalty period who were not in breach and some who voluntarily sold their properties while the ATO was examining their case.
“There are at least 25 examples of foreign investors self-divesting in this way showing a change in behaviour towards more compliance with the rules and a strengthening of the program overall.
“While Australia welcomes foreign investment, foreign investors must comply with our laws.”