Australia widens probe into illegal home buying by foreigners

[webfact]

Australia widens probe into illegal home buying by foreigners

SYDNEY (AFP) - Australian Treasurer Joe Hockey on Tuesday widened a probe into the illegal buying of residential property by foreigners, with almost 200 sales being investigated for breaching investment rules.

Prices of residential real estate in some of Australia’s biggest cities, such as Sydney and Melbourne, have soared in recent years, with concerns growing that cashed-up foreigners, particularly from China, have helped inflate the market.

"The Australian Taxation Office is using all the resources of government to fully investigate any suggestions that come forward that a foreign person has unlawfully purchased real estate in Australia," Hockey said, with 60 officials on the case.

"This is the tip of the iceberg. The data-matching powers of the Australian Taxation Office are formidable. And they will give us the power to look right across the system."

The government announced a crackdown on illegal purchases earlier this year and said it would rigorously enforce rules under which foreigners are only allowed to buy new dwellings, and not existing residential property.

Hockey created headlines in March by issuing a divestment order on a luxury Sydney mansion worth Aus$39 million ($30 million) bought illegally under foreign investment rules by China’s Evergrande Real Estate Group. It has since been sold.

He said last month that some 100 cases of illegal purchases were being probed, which has now spiralled to almost 200.

The treasurer added that the widening inquiry spanned the breadth of the market, from properties valued at Aus$300,000 to more than Aus$40 million.

In one case, an overseas buyer was being investigated for owning 10 homes over two states.

"The Australian Taxation Office is finding increasingly that there is a likelihood of taxation fraud, as well as unlawful purchase of real estate by foreign entities," Hockey told reporters.

Foreign investors who have bought illegally have a moratorium until December 1 to come forward, with Hockey adding that 24 of the cases being examined involved voluntary disclosures by buyers.

Hockey, who is a member of parliament for North Sydney, himself reported a neighbour’s property purchase over fears it was obtained through "spurious grounds".

"I referred one of my own neighbours for investigation and found out that yes, they had got approval but on pretty spurious grounds," he said.

"I’m waiting to hear back."

Sydney residential real estate prices have jumped by 15 percent in the year to May 31, with a median value of Aus$752,000, according to widely-cited figures by CoreLogic-RP Data.

Melbourne home prices have soared by nine percent during the same period to a median of Aus$569,500, the data showed.


-- (c) Copyright AFP 2015-06-09

[JetsetBkk]

Concerns over "cashed-up foreigners", eh? Getting as bad as Thailand.

[simple1]

Concerns over "cashed-up foreigners", eh? Getting as bad as Thailand.

Foreigners are permitted to acquire new build housing. Oz govt is trying to address purchase of existing properties purchased illegally via front company entities, friends on their behalf or simply ignoring legislation. However, some additional concerns have been raised, especially with PRC Chinese, using funds acquired via corruption for investment.

[ezzra]

The issue at hand here ate that those properties in Australia were bought with unlawful monies

leaving China, China allows only small sums of money to be repatriated or taken out side the

country and here you have Chinese people buying home worth many billions of Aussie

dollars, hence the sources of the funds paid for those properties are illegal....

[Berkshire]

Concerns over "cashed-up foreigners", eh? Getting as bad as Thailand.

Foreigners are permitted to acquire new build housing. Oz govt is trying to address purchase of existing properties purchased illegally via front company entities, friends on their behalf or simply ignoring legislation. However, some additional concerns have been raised, especially with PRC Chinese, using funds acquired via corruption for investment.

I would imagine the Aussie government will uncover quite a lot of illegal home buying. In fact, it will be staggering. Australia will learn that when you have exceptions or loopholes, people will exploit it. This is why the Thai government does not want to go down that same path with regard to foreign land ownership. The consequences are all too predictable.

[Suradit69]

Concerns over "cashed-up foreigners", eh? Getting as bad as Thailand.

Foreigners are permitted to acquire new build housing. Oz govt is trying to address purchase of existing properties purchased illegally via front company entities, friends on their behalf or simply ignoring legislation. However, some additional concerns have been raised, especially with PRC Chinese, using funds acquired via corruption for investment.

"... using funds acquired via corruption for investment"

In what way would that involve tax fraud or illegal purchases by a foreign entity?

"The Australian Taxation Office is finding increasingly that there is a likelihood of taxation fraud, as well as unlawful purchase of real estate by foreign entities," Hockey told reporters.

Sounds like a screen to filter out those who don't meet a skin hue standard.

The Australian Government (based in Canberra, Australia’s capital city) is aware of the fact that some of Australia’s citizens are cautious about foreign individuals or companies buying residential real estate (defined as all Australian real property, including vacant land).

It wants to ensure that the foreign real estate ownership it does allow is of benefit to the community and in keeping with the community needs. Therefore, the Australian Government insists that all applications from foreign citizens or companies to buy residential real estate (either already developed - such as houses and apartments - to be developed, to be redeveloped or existing only at plan stage) are put before the Foreign Investment Review Board (FIRB), one of its advisory boards.

This advisory board reports to Treasury and reviews all applications by to purchase residential real estate, no matter what the value of the intended purchase is, by anyone who is NOT an Australian citizen, an approved migrant, a permanent resident of Australia, a foreign national holding a permanent visa or a person who, despite being a foreign citizen, is entitled to permanent residence status in Australia, should they take it up, such as a citizen of New Zealand. These people are holders of "special category visas".

[Johnsy]

It's simple, you have reciprocal policy, if I (as an Australian) can't buy a house in your country (China etc) then you can't buy a house in my country! WT!F why is the Australia government selling our land to foreign owners and investors? Why isn't the government leasing it instead? Because at the end of the day it's a sh*t load of money in their pockets, same as the mining game. The owners get rich and fat while most of the population is marginalized even more.

[Soutpeel]

It's simple, you have reciprocal policy, if I (as an Australian) can't buy a house in your country (China etc) then you can't buy a house in my country! WT!F why is the Australia government selling our land to foreign owners and investors? Why isn't the government leasing it instead? Because at the end of the day it's a sh*t load of money in their pockets, same as the mining game. The owners get rich and fat while most of the population is marginalized even more.

And TV's finest whing about Thailand's land ownership

Polices seems Thailand is ahead of the game in this regard

Edited June 9, 2015 by Soutpeel

[GOLDBUGGY]

What happened to free enterprise?

Australia has a lot of land. So just build more houses, put more people to work, and you have more people paying taxes, including property tax on these new houses.

What is the difference if a Foreigner has to buy a new house or an older one. The results are the same. If Foreigner would buy this house from an Australian what is he going to do with this extra money? Retire to a warmer climate? Hardly! More likely invest it in Australia or buy a new or newer home. Same Same I figure.

Where you run into trouble is when you get a government sticking their nose in places it does not belong, like in free enterprise. Quite awhile ago when it was formally announce by Britain that Hong Kong would be turned back to China in 10 years, many Rich Chinese their panicked. The Canadian Government offered them a solution to their problem. If they invested $1 M in Canada they could immigrate to Canada.

Many of them did and landed in the city called Vancouver. Much of there needed investment was put in housing so this quickly drove up the housing cost in that city. As more and more came the higher the cost to buy your own place became and soon the average Canadian could not afford to live their. This went on for many years and until they gained their Canadian Citizenship.

Surprisingly, or maybe not, once they gained there citizenship, and things died down in Hong Kong, and turned out not to be as bad as everyone their expected, many of these immigrants sold there investments in Canada and moved back to Hong Kong. I forget the exact figures now but something like 80%. These Mansions they once owned were now converted into Apartment Buildings and rented out to Canadians who could not afford to buy there own home there.

When questioned why some many moved back the answer was all basically the same. "Canadian Taxes were too High!"

Governments need to make it easier for their own citizens to buy a house. Not make it more difficult for a Foreigners to! In My Book they got it Ass Backwards!

. .

[jackanapes]

I wonder how well liked hockey is with his neighbours probing into their affairs and how they appropriated their houses naughty naughty.

[Linky]

The Oz PM recently said that as a home owner he was very happy that the cost of housing is rising. Isnt that what homeowners want?

Then on top of that...

The Treasurer has also said that if people trying to buy a first home cannot afford it because of the rising prices that they need to change jobs to get more money. How nice of him. Much like his other gaffe that the rising petrol costs etc should not be a problem for the poor because the poor dont own cars.

[Linky]

Just to add to the Treasurer's problems he is also under fire for staying at the home owned by his wife and father when he is in Canberra for parliament sittings.

He insists he must pay rent when there at a cost of $48,000 a year (for 180 days). A cost the taxpayer has to pay for the rent. He wont stay in a hotel as he says he likes a place he is comfortable in.

How nice of him to allow the taxpayers to pay $48,000 a year to pay off his wife and father's house.

And to think his big issue at the election was that the age of entitlement is over. Well apparently not for some.

[simple1]

Foreigners are permitted to acquire new build housing. Oz govt is trying to address purchase of existing properties purchased illegally via front company entities, friends on their behalf or simply ignoring legislation. However, some additional concerns have been raised, especially with PRC Chinese, using funds acquired via corruption for investment.

"... using funds acquired via corruption for investment"

In what way would that involve tax fraud or illegal purchases by a foreign entity?

"The Australian Taxation Office is finding increasingly that there is a likelihood of taxation fraud, as well as unlawful purchase of real estate by foreign entities," Hockey told reporters.

Sounds like a screen to filter out those who don't meet a skin hue standard.

The Australian Government (based in Canberra, Australia’s capital city) is aware of the fact that some of Australia’s citizens are cautious about foreign individuals or companies buying residential real estate (defined as all Australian real property, including vacant land).

It wants to ensure that the foreign real estate ownership it does allow is of benefit to the community and in keeping with the community needs. Therefore, the Australian Government insists that all applications from foreign citizens or companies to buy residential real estate (either already developed - such as houses and apartments - to be developed, to be redeveloped or existing only at plan stage) are put before the Foreign Investment Review Board (FIRB), one of its advisory boards.

This advisory board reports to Treasury and reviews all applications by to purchase residential real estate, no matter what the value of the intended purchase is, by anyone who is NOT an Australian citizen, an approved migrant, a permanent resident of Australia, a foreign national holding a permanent visa or a person who, despite being a foreign citizen, is entitled to permanent residence status in Australia, should they take it up, such as a citizen of New Zealand. These people are holders of "special category visas".

Post removed to enable reply.

Purchasing property from funds acquired by corruption equates to money laundering; an illegal activity. Cannot be bothered to look it up to post the URL, but over recent years at least two trillion US dollars have been laundered offshore by PRC corrupt individuals.

To accuse the Australian government of racist driven policy in this matter is silly. As of the 2011 census Chinese heritage Australians represented 4% of the population (865,000 people). As a bit of detail you may recall the government permitted permanent residency for 10,000 Chinese students studying in Australia after the Tiananmen Square massacre.

[lostoday]

It's simple, you have reciprocal policy, if I (as an Australian) can't buy a house in your country (China etc) then you can't buy a house in my country! WT!F why is the Australia government selling our land to foreign owners and investors? Why isn't the government leasing it instead? Because at the end of the day it's a sh*t load of money in their pockets, same as the mining game. The owners get rich and fat while most of the population is marginalized even more.

And TV's finest whing about Thailand's land ownership

Polices seems Thailand is ahead of the game in this regard

I think behind is the word you are looking for. Current economic theory thinks restrictive laws for land ownership belongs to the middle ages.

[lostoday]

What happened to free enterprise?

Australia has a lot of land. So just build more houses, put more people to work, and you have more people paying taxes, including property tax on these new houses.

What is the difference if a Foreigner has to buy a new house or an older one. The results are the same. If Foreigner would buy this house from an Australian what is he going to do with this extra money? Retire to a warmer climate? Hardly! More likely invest it in Australia or buy a new or newer home. Same Same I figure.

Where you run into trouble is when you get a government sticking their nose in places it does not belong, like in free enterprise. Quite awhile ago when it was formally announce by Britain that Hong Kong would be turned back to China in 10 years, many Rich Chinese their panicked. The Canadian Government offered them a solution to their problem. If they invested $1 M in Canada they could immigrate to Canada.

Many of them did and landed in the city called Vancouver. Much of there needed investment was put in housing so this quickly drove up the housing cost in that city. As more and more came the higher the cost to buy your own place became and soon the average Canadian could not afford to live their. This went on for many years and until they gained their Canadian Citizenship.

Surprisingly, or maybe not, once they gained there citizenship, and things died down in Hong Kong, and turned out not to be as bad as everyone their expected, many of these immigrants sold there investments in Canada and moved back to Hong Kong. I forget the exact figures now but something like 80%. These Mansions they once owned were now converted into Apartment Buildings and rented out to Canadians who could not afford to buy there own home there.

When questioned why some many moved back the answer was all basically the same. "Canadian Taxes were too High!"

Governments need to make it easier for their own citizens to buy a house. Not make it more difficult for a Foreigners to! In My Book they got it Ass Backwards!

. .

Sounds like something the British told the native Americans when they bought Manhattan for a few beads or when they took over Australia from the Aborigines. We still have that same Westminster system as well. I don't know if one could say that the indians or aboriginals are that much better off.

Boy did you fall asleep in grade school history class. It was the Dutch who bought Manhattan from the Indians.

[lostoday]

The issue at hand here ate that those properties in Australia were bought with unlawful monies

leaving China, China allows only small sums of money to be repatriated or taken out side the

country and here you have Chinese people buying home worth many billions of Aussie

dollars, hence the sources of the funds paid for those properties are illegal....

Oh my Got. Do you mean those nefarious Chinese have figured out a way to get cash out of the country? Who would have thought it

[connda]

Every country in the world, that can, has the digital fiat money making machines turned on full-blast. Unlike the Fed would have you believe, that money isn't going into the general economy. The money, in the hands of a very few, is going into hard assets, like land, anywhere it can be bought. That bubble will pop eventually and all those digital zeros will disappear.

[konying]

For the life of me i do not see why so many people are up in arms.

Australia allows foreigners to buy any new development, it is a lot more than many other countries allow.

[Queenslander]

But, they are all Mr Rudd's mates…what harm can that be…except that China will own (eventually), like it will in other countries, more of Oz than the Aussies! But what the heck it will soon be a Caliphate anyway…as long as social security payments don't end!

[lostoday]

But, they are all Mr Rudd's mates…what harm can that be…except that China will own (eventually), like it will in other countries, more of Oz than the Aussies! But what the heck it will soon be a Caliphate anyway…as long as social security payments don't end!

Somehow I don't think the Caliphate would be a problem for China.

[mango66]

Concerns over "cashed-up foreigners", eh? Getting as bad as Thailand.

Foreigners are permitted to acquire new build housing. Oz govt is trying to address purchase of existing properties purchased illegally via front company entities, friends on their behalf or simply ignoring legislation. However, some additional concerns have been raised, especially with PRC Chinese, using funds acquired via corruption for investment.

stop the Chinese !

When our GVTs will get clever on this ??

[GOLDBUGGY]

What happened to free enterprise?

Australia has a lot of land. So just build more houses, put more people to work, and you have more people paying taxes, including property tax on these new houses.

What is the difference if a Foreigner has to buy a new house or an older one. The results are the same. If Foreigner would buy this house from an Australian what is he going to do with this extra money? Retire to a warmer climate? Hardly! More likely invest it in Australia or buy a new or newer home. Same Same I figure.

Where you run into trouble is when you get a government sticking their nose in places it does not belong, like in free enterprise. Quite awhile ago when it was formally announce by Britain that Hong Kong would be turned back to China in 10 years, many Rich Chinese their panicked. The Canadian Government offered them a solution to their problem. If they invested $1 M in Canada they could immigrate to Canada.

Many of them did and landed in the city called Vancouver. Much of there needed investment was put in housing so this quickly drove up the housing cost in that city. As more and more came the higher the cost to buy your own place became and soon the average Canadian could not afford to live their. This went on for many years and until they gained their Canadian Citizenship.

Surprisingly, or maybe not, once they gained there citizenship, and things died down in Hong Kong, and turned out not to be as bad as everyone their expected, many of these immigrants sold there investments in Canada and moved back to Hong Kong. I forget the exact figures now but something like 80%. These Mansions they once owned were now converted into Apartment Buildings and rented out to Canadians who could not afford to buy there own home there.

When questioned why some many moved back the answer was all basically the same. "Canadian Taxes were too High!"

Governments need to make it easier for their own citizens to buy a house. Not make it more difficult for a Foreigners to! In My Book they got it Ass Backwards!

. .

Sounds like something the British told the native Americans when they bought Manhattan for a few beads or when they took over Australia from the Aborigines. We still have that same Westminster system as well. I don't know if one could say that the indians or aboriginals are that much better off.

Well, you can look at it in 2 ways and the way I like to do things.

The Native American Indian may have settle on Manhattan Island centuries ago. When they first arrived the island was no more than a bunch of trees, heavy brush, and swamp land. After a couple of thousand years of there settlement on Manhattan it was now, a bunch of trees, heavy brush, and swamp land. Do you see where I am going with this?

Did you ever stop to think that when the Dutch bought Manhattan Island from the Native Indians that it wasn't worth much more to them than a few beads to them? And why should it be? The island wasn't loaded with Wild Game. To find that all they needed to do to was to pull up tent stakes and move upstate to Buffalo New York, where the plains there were covered by millions of Bison.

You don't have to go that far back in history to see other examples of when the Nationals (Natives) of that country did not see any value on there land. When the Americans first started drilling for oil in Saudi Arabia after the war, and for a fee and the kings permission, the Saudis laughed at them and thought them foolish. They thought the Americans would do much better drilling for water and not oil, as to them water was more valuable. Just like Buffalo was more valuable to the Native Indian than a bunch of trees, heavy brush, and swamp land. The rest, as you know, is history.

Consider a time before settlement in Australia and Canada. Nobody wanted to go their even when the land was cheap or free. You certainly didn't want to go to Australia as it was a Penal Colony full of hardened criminals. Canada wasn't much better with its harsh wilderness and severe winters. Where the first Settlers in America would have surely starved to death if it were not for the discovery of Corn, introduced to them by the Native Indian.

So even when they were offered cheap or free land, not many wanted to immigrate. And why would they? To pull up stakes in your home land just to take many weeks long journey in a ship across a rough ocean, in cramped living conditions, and you total life's possessions was only what you could carry. Would this not be almost the equivalent today of you immigrated to Mars carrying only 2 Suit Cases?

My point is simple! Something isn't worth anything until you make something out of it, which very few people want to do. Once you and your ancestors have made something great from nothing, then everyone wants to share in it. As in Canada and Australia. I say that if they now want a piece of this Golden Pie then they should be made to pay for it. No More Free Handouts!

[gandalf12]

I guess australia is as anti foreigner as a number of other coutries. Pity they dont remember that apart from the Aboriginies who are the indiginous people of the country, every one else is either an immigrant or of convict decent.

[Berkshire]

What happened to free enterprise?

Australia has a lot of land. So just build more houses, put more people to work, and you have more people paying taxes, including property tax on these new houses.

Many of them did and landed in the city called Vancouver. Much of there needed investment was put in housing so this quickly drove up the housing cost in that city. As more and more came the higher the cost to buy your own place became and soon the average Canadian could not afford to live their. This went on for many years and until they gained their Canadian Citizenship.

. .

Not sure what your point is. On the one hand, you insists on "free enterprise." On the other hand, you talk about what happened in Vancouver, and how foreign investment ultimately resulted in the average Canadian not being able to afford their own home.

But to the free enterprise angle. What would happen if Australia opened up foreign land and business ownership with no restrictions? I'd imagine the Chinese would be buying up large tracks of undeveloped land, bring in their own workers, and develop it themselves. Would that be ok with you? I mean, free enterprise at its finest.

[Nobb]

The government is right but greedy Aussies who do not respect the government law should be sent to jail. The Chinese bought the land because the greedy Aussies sold it to them. They new it was wrong but greed over toke there Aussie pride. Why did this problem take so long to bring to the courts. Bad government officials and corruption in the lower government!

[Linky]

The government is right but greedy Aussies who do not respect the government law should be sent to jail. The Chinese bought the land because the greedy Aussies sold it to them. They new it was wrong but greed over toke there Aussie pride. Why did this problem take so long to bring to the courts. Bad government officials and corruption in the lower government!

I think you will find most people selling their home wouldnt even be aware of that law. Why should it concern them. It isnt against the law to sell to the Chinese. It is against the law for the Chinese to buy. As a home seller why would you care who buys it?

You call it greed. Will you be refusing to sell your home, or anything else for that matter, for a profit?

[Tassie Norm]

I guess australia is as anti foreigner as a number of other coutries. Pity they dont remember that apart from the Aboriginies who are the indiginous people of the country, every one else is either an immigrant or of convict decent.

'Anti foreigner'? You're definitely not an Aussie, else severely un/il-informed. Legal immigrants who have adapted to the western ethic are greatly appreciated and embraced in Oz. They are also welcome to practice their religion and live with their culture - no tolerance for extremism - okay with you?

Aborigines? As for being indigenous they did arrive a 'touch' earlier however the Great Southern Land was always going to be populated by 'outsiders', would you consider the 'black fellas' would have done better under, say, Indonesian rule. (Check what happened in Papua New Guinea).

[maidee]

just check where the money comes from ?

[Publicus]

The PRChinese who are legally buying residential properties in many Western countries are normally welcomed by governments and neighbors alike.

The philosophy of a significant number of the PRChinese capitalist class, the very few of 'em, is to in their words make it over here and use it over there. It of course is money and there is of course the West.

The Chinese who are moving in are the entrepreneurial Chinese whose kids have dual citizenship (taken to Hong Kong to be born there) in the Western country such as Australia. These are Chinese who want themselves and their posterity to live in a free and open capitalist democracy even if they themselves have to learn it from scratch.

Capitalist Chinese getting their hundreds of millions in dollar value out of the PRChina are necessarily going to have some soiled money as it were...a lot of it in fact. It's unavoidable, so allowances need to be made. My not being Australian, I hesitate to presume saying to get rid of the existing law about already constructed housing, but that's a thought I have in this too.

Sounds like some of the Oz property markets might need a tad of new but temporary regulating to help tame those prices in certain places. Very few Chinese have a single family house btw or have ever had one. Most of 'em live in very high residential buildings that go on for miles and then some, all bunched together (same same in S Korea).

[Publicus]

I guess australia is as anti foreigner as a number of other coutries. Pity they dont remember that apart from the Aboriginies who are the indiginous people of the country, every one else is either an immigrant or of convict decent.

'Anti foreigner'? You're definitely not an Aussie, else severely un/il-informed. Legal immigrants who have adapted to the western ethic are greatly appreciated and embraced in Oz. They are also welcome to practice their religion and live with their culture - no tolerance for extremism - okay with you?

Aborigines? As for being indigenous they did arrive a 'touch' earlier however the Great Southern Land was always going to be populated by 'outsiders', would you consider the 'black fellas' would have done better under, say, Indonesian rule. (Check what happened in Papua New Guinea).

Indeed, indigenous peoples everywhere, as in the instance of the Aborigines down under, would have fared much better by simply getting out of the way.

But they fought and they fought, learning nothing from the constant and long term losses. The result is defeat as their creed and a certain animosity toward them from their new landlords. If apologies might be in order for the original times of conflict, they'd best be mutually done.