A new law to be bought in during the Federal Parliament’s next sitting period would seek to close existing loopholes that currently allow the illegal purchase of existing properties in Australia by foreign nationals. This comes off the back of a National Australia Bank survey of 300 people in the Australian real estate and development sector which reported that foreigner’s bought 9.4% of established homes in Australia between April and June, despite rules that seek to limit foreign purchasers to buying new properties.
As the law currently stands in Australia, foreigners are barred from purchasing existing dwellings, making new properties far more attractive to foreign investors. Australian permanent residents may purchase existing dwellings, along with temporary residents, however temporary residents must sell the property upon their departure from Australia. Despite these rules, foreigners accounted for 16.1% of the established homes and apartments purchased in Victoria between April and June.
When Parliament resumes on August 10th, the Federal Government will be seeking to close the loophole, introduce penalties for those who assist in the illegal purchase, and also create new civil penalties related to the offence. Kelly O’Dwyer, the Parliamentary Secretary to the Treasurer Joe Hockey, has stated that “It’s clear that more accurate information needs to be compiled on what is going on in the residential property market.” The Federal Government is currently in talks with the states to a national land register which would provide a mechanism for greater enforcement of the new laws.
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