Since 2015, more than 300 foreign buyers who remained in breach of ownership rules have actually been required by the government to sell their Australian real estate properties.
The government granted the ATO increased power for real estate compliance on 1 December 2015, and since then, foreign property buyers from China, India, the US, UK, and Germany have been forced to sell $380 million of their Australian real estate.
In the 2017/18 financial year, the bulk of these forced sales occurred in Melbourne, where the average rate of each deal was $1.13 million.
According to the office of Federal Treasurer Josh Frydenberg, the crackdown has resulted in forced sales of 316 residential and commercial properties.
The government stated, “The overwhelming majority remain in Victoria, which tape-recorded 144 required sales of residential or commercial property valued in excess of $162 million, followed by New South Wales with 73, and Queensland with 64.”
The average worth of seized properties in Victoria was $1.13 million compared to approximately $1.8 million in NSW.
The crackdown by the ATO on foreign buyers has picked up speed which has resulted in the number of forced sales going up each year. Since 1 December 2015, the ATO has been responsible for enforcing the Foreign Acquisition and Takeover Act, including the screening of foreign buyer applicants.
This has affected 54 real estate properties from foreign buyers undergoing a forced sale in the 2015/16 financial year, then another 96 properties in 2016/17, followed by 131 properties as of June this year.
Furthermore, the ATO has issued 1500 penalty notices to foreign buyers over this period who had either “failed to obtain Foreign Investment Review Board approval before buying property,” or “breached a condition of previously approved applications.”
Due to the increased government management of this sector, the number of foreign real estate buyers in Australia has decreased considerably ending the boom in sales to foreign investors.
This article first appeared on businessinsider.com.au.
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