The $39 million forced sale of Sydney property Villa del Mare appears to be the (very expensive) tip of a foreign property ownership iceberg. Federal minister Joe Hockey has announced that there are currently just over 480 properties under investigation – worth approximately $1 billion – by the Foreign Investment Review Board (FIRB).
Additionally, another five properties have been ordered to be sold within the next 12 months. The properties are located in Ardross (in Perth), Elizabeth Bay (in Sydney), Underdale (in Adelaide), Stretton (in Brisbane) and Labrador (on the Gold Coast).
The purchase prices of the properties range in value from $265,000 to $8.1 million.
The FIRB is currently running an amnesty period – or reduced penalty period – for foreign investors to voluntarily disclose a breach of foreign investment rules. The amnesty runs until 30th November. Whilst investors who come forward under the amnesty will still be forced to sell the properties if they are found to be in breach of the laws, they will not be referred for criminal prosecution.
Interestingly though, the majority of the 481 current investigations would seem to be a result of “dobbing in” a neighbour.
Joe Hockey made the following statements on Wednesday 16th September:
“Since transferring residential real estate compliance functions to the Australian Taxation Office in May, over 3,000 pieces of information relating to suspected breaches have come to light via data matching with third party sources including the Foreign Investment Review Board, Immigration, AUSTRAC and state and territory land title offices.
“Through the information provided by the public, together with our own enquiries, we now have 481 cases under active investigation.
“I expect more divestment orders will be announced in the future and once again warn foreign investors in residential real estate that they must comply with Australian law.
“Time is running out for foreign investors to voluntarily come forward if they have illegally purchased existing residential real estate.
“They have until 30 November 2015 to come to us before we come to them.”