The Australian government has just ordered the sale of eight more residential properties that were purchased in breach of foreign ownership laws. The move was in response to concerns regarding increased house prices due to offshore buyers.
Homes in Australian capital cities have been considered as one of the most expensive across the world.
According to CNBC, the Federal Government has declared "penalties for foreigners who breach existing rules that restrict them to buying new homes only."
On Monday, treasurer Scott Morrison said that the additional eight properties has brought the overall number to 27 homes worth AU$76.4 million that the government has declared as illegally purchased by foreigners, majority of which were Chinese nationals.
The Australian government has also said that it had already investigated over 1,300 property sales, while another 800 are undergoing investigation, since the crackdown began last year.
Foreign buyers are required by law to receive approval from the Foreign Investment Review Board before purchasing an established property in Australia.
Although foreign sales pose a great benefit to Australia, the government claims that the initiative is to make sure that investments would not contradict the country's interests. The Herald Sun reports:
"Mr. Morrison said: 'We recognize that foreign investment provides significant benefits for Australia, but we must also ensure that such investment benefits all Australians, conforms to our rules and is not contrary to our national interest. 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."
Foreign buyers who have breached the foreign ownership laws could face severe penalties: non-valid purchases can result in criminal penalties of AU$135,000 or three years imprisonment or both for individuals, while companies may receive up to $675,000 in penalties.
In addition, the new rules will also forfeit any capital gains earned on the illegal investments.
