"Chinatown"-Official media of Chinese Australians

Since December 12st, foreigners’ illegal purchase of existing homes in Australia will be severely cracked down. Since the announcement of the new regulations, the enforcement activities of the Australian Taxation Office (ATO) and the Federal Police Service (AFP) have become lively. Together with the media’s great momentum, it looks like the government It is spreading the net for foreign buyers.

However, Australian Finance Minister Hawke’s comments on the 9th that “the image of Australia’s foreign investment destinations will not be damaged” seem to remind the limitations of the current wave of crackdowns.

ACB News "Australia Finance Online" reported that after the Australian Taxation Bureau took over the supervision of foreign investment in real estate, it detected nearly 200 cases of illegal house purchases. The Australian Finance Minister told reporters in Sydney on Tuesday (June 6) that he "knows that there are many cases", but when asked whether it would damage Australia's image as a foreign investment destination, he categorically replied "not at all. will not".

Australia prohibits foreigners from buying existing homes and only allows them to invest in new houses. According to the new foreign investment regulations, foreign buyers and sales intermediaries who facilitate illegal transactions will face fines of up to 10 Australian dollars or up to three years in prison.

Judging from the current official and industry news, the Australian government's current round of law enforcement is mostly concerned with super luxury houses. The ATO tax commissioner confirmed to the Senate last week that the Australian Taxation Office is currently investigating 195 suspected foreign-invested properties. Among them, 40 sets are reported by the community, another 24 buyers are automatically reported, and the rest are audited by the tax bureau. Although it is impossible to disclose the real estate price range investigated by the ATO, Neil Olesen, the second commissioner of the tax bureau, hinted that a large part of it comes from the high-end market. "One of the things we keep in mind during our compliance enforcement process is to look at the transactions with huge value in the past 5-10 years."

The Australian Federal Police has set up a special team to investigate illegal property purchases by foreign investors and have contacted many leading real estate brokerage companies in Sydney. According to The Australian, the agent of LJ Hooker Double Bay Company Bill Malouf managed to sell Mandalay, a popular mansion in Sydney Harbour, to a Chinese buyer with Australian resident status for A$4000 million. A few days later it was questioned by the Federal Police. Inquiry to verify the authenticity of the transaction. "Obviously, the Federal Police has a special department to check overseas property purchases." They will check every transaction involving foreign buyers, especially transactions with the tens of millions of Australian dollars.

In March this year, Treasury Secretary Hawke issued the first forced sale order, requiring a Chinese-owned holding company to resell the Sydney Villa de Mare apartment within 3 days. There was news last week that the Australian Treasury Secretary will announce No. 90 order in the near future, and then the Associated Press revealed that the case involved a British property in Perth, Western Australia, which was worth 2 Australian dollars, but it was automatically reported.

Concerns about the influx of foreign buyers, especially Chinese buyers, driving high housing prices and the accompanying public opinion pressure are regarded as the main reason for the Australian government to strengthen supervision of foreign purchases. On the surface, the policy benefits of the new regulatory regulations are on the one hand tax collection and income generation, on the other hand, it is stabilizing the existing housing market. However, the current focus of the crackdown seems to be on high-end luxury properties that are difficult for ordinary buyers to reach. As a result, the effect of stabilizing housing prices in the existing home market may be minimal.

The cooling of the resource boom has caused a great impact on the Australian economy. The Australian government has high hopes for the real estate sector, which is the backbone of the non-mining economy, and curbs the purchase of existing homes by foreign investors.

From this perspective, Treasury Secretary Hawke has "no worries" about the prospects of attracting capital in the Australian housing market, and the signal sent is really intriguing.

Article reprinted from ACB News "Australia Finance Online"


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