The treasurer said he expects more divestment orders will be announced soon, and promised to increase penalties for those who break the rules.
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The Australian government is intensifying its crackdown on illegal purchases of residential properties in the country, focusing on foreign buyers.
Treasurer Joe Hockey is the latest MP to have his travel expenses scrutinised after public documents by the Department of Finance revealed he had spent $14,000 on a trip from Sydney to Perth.
Six homes in Perth, Brisbane and Sydney illegally bought by foreigners will have to be sold and 462 other possible breaches are being investigated.
With skyrocketing house prices putting homeownership out of reach of many Australian citizens, the conservative government is under pressure to make housing more affordable, and rein in surging investor buying that some fear may push the market to unsustainable levels, causing a crash as the economy slows at the end of a long mining boom. He said he had been contacted by federal Prime Minister Tony Abbott and a number of state premiers following their recent leaders’ summit and had been assured that “there were very productive discussions about tax reform”.
According to Hockey, some of the properties were purchased with Foreign Investment Review Board approval, but the investor failed to comply with the divestment requirements after their circumstances changed.
“Some have simply broken the rules”.
The owners of the six properties came forward voluntarily under a government amnesty and will not be prosecuted.
Foreign investors who have illegally purchased residential real estate in Australia have until November 30 to turn themselves in and avoid being referred for criminal prosecution.
The breach in foreign ownership carries the penalty of $127,500 or three years imprisonment for individuals and $637,500 for companies.
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They will include tougher civil penalties, which will see investors lose the capital gain made on the property, 25 per cent of the purchase price or 25 per cent of the market value of the property.
