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Australian government to tighten screws on foreign investors



The Australian government plans on clamping down on foreign investors by introducing new penalties for those who bought properties without proper approval and new fees under a proposed plan. This is amidst growing concerns from the community that foreign investors are squeezing out local buyers. Foreign investors who did not gain proper approval will have until November this year to come forward or deal with the new penalties.

The proposed plan includes fines in excess of $100,000 and up to three years jail for individuals and $600,000 or more in fines for companies who did not gain proper approval when purchasing property in Australia. The plan also includes new fees for foreign acquisition applications and transactions such as a $5000 fee for properties worth up to $1 million and $10,000 for properties over $1 million. The plan also includes lower thresholds for purchase of rural land, now $15 million down from $252 million, and agribusiness, now $55 million down from $252 million.

Currently, foreign investors are all but excluded from buying existing residential real estate but are allowed to buy new residential property, subject to approval. However, Prime Minister Tony Abbott believes that it is foreign investors who are illegally buying into the existing property market that are forcing prices to rise. Mr Abbott has said that the current rules controlling foreign acquisition of real estate were not being enforced and that there has not been one prosecution or divestment order under Labor. “We don’t want to depress property markets,” Mr. Abbott said. “We want to ensure that locals are getting a fair go, that the playing field is at least level and, if possible, slightly tilted towards locals.”

Last modified on Monday, 04 May 2015 13:54

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