Australian Treasurer Joe Hockey reported that several foreign home owners have been told to sell their real estate properties as the government strictly implements its homeownership laws against abusive foreign investors.
Six properties across the cities of Sydney, Brisbane and Perth that are valued between 152,000 and 1.86 million Australian dollars are currently owned by foreign investors from China and other countries. These six properties are just part of the recently discovered 462 possible cases of breaches in foreign homeownership rules after the government increased the budget for investigating these cases for the month of May.
Mr. Hockey said that more orders for foreign investors to sell their properties will be released soon and the penalties for lawbreakers will also increase. During the past few years, real estate prices has skyrocket making it unaffordable for Australian citizens and foreign investors are believed to be part of pushing up the prices in the real estate market. The government is now doing efforts to make housing more affordable for its own citizens.
Australian government is starting to worry that investors from China and Southeast Asia might be the reason why housing prices are reaching up to the ceiling. Also, it was reported that China has already became the country's biggest source of foreign investment with a total of 27.6 billion Australian dollars which half is accounted by real estate market.
Last March, a Hong Kong- based buyer of a 39 million Australian dollar mansion in Sydney was ordered to sell the property after finding out that the said mansion was bought illegally. The latest order of selling properties are issued to five investors from four countries, which includes China. Some of the investors have approval from Foreign Investment Review Board but failed to comply with divestment requirements when there were changes on their status while others purchased property with no approval at all.
The concerned investors have now one year to sell their properties after taking advantage of an amnesty from criminal prosecution. Mr. Hockey also said that foreign investors have until November 30 to submit themselves under the amnesty if they purchased the properties illegally.
Under the new law Mr. Hockey is proposing, rule breaker will get a maximum fine of 127,500 Australian dollars or three years imprisonment. Their capital gain made from the property, 25% of the purchase price or 25% of the market value, whichever is greater, will be also be taken from them.
