Australia widens probe into illegal home buying by foreigners
Australian Treasurer Joe Hockey on Tuesday widened a probe into the illegal buying of residential property by foreigners, with almost 200 sales being investigated for breaching investment rules.
Prices of residential real estate in some of Australia’s biggest cities, such as Sydney and Melbourne, have soared in recent years, with concerns growing that cashed-up foreigners, particularly from China, have helped inflate the market.
“The Australian Taxation Office is using all the resources of government to fully investigate any suggestions that come forward that a foreign person has unlawfully purchased real estate in Australia,” Hockey said, with 60 officials on the case.
“This is the tip of the iceberg. The data-matching powers of the Australian Taxation Office are formidable. And they will give us the power to look right across the system.”
The government announced a crackdown on illegal purchases earlier this year and said it would rigorously enforce rules under which foreigners are only allowed to buy new dwellings, and not existing residential property.
Hockey created headlines in March by issuing a divestment order on a luxury Sydney mansion worth AU$39 million (US$30 million) bought illegally under foreign investment rules by China’s Evergrande Real Estate Group. It has since been sold.
He said last month that some 100 cases of illegal purchases were being probed, which has now spiraled to almost 200.
The treasurer added that the widening inquiry spanned the breadth of the market, from properties valued at AU$300,000 to more than AU$40 million.
In one case, an overseas buyer was being investigated for owning 10 homes over two states.
Foreign investors who have bought illegally have a moratorium until Dec.1 to come forward, with Hockey adding that 24 of the cases being examined involved voluntary disclosures by buyers.