The Assistant Treasurer, Senator Nick Sherry, this week announced a major tightening of the foreign investment rules as they relate to residential real estate and a package of tough new civil penalty, compliance, monitoring and enforcement measures.
The new rules will mean that foreign non-residents can only invest in Australian real estate if that investment adds to the housing stock, and that investments by temporary residents in established properties are only for their use whilst they live in Australia.
"The new provisions ... will mean that anyone trying to flout Australia's strict foreign investment rules will face tough new penalties that will be fully enforced", Senator Sherry said.
All temporary residents seeking to purchase an existing property in Australia will now be brought within the Foreign Investment Review Board (FIRB) notification, screening and approval process.
These changes ensure that temporary residents are subject to the same process required of foreign non-residents.
In addition, temporary residents who are approved will now have to:
- compulsorily sell the established property they have bought when they depart Australia; and
- be required, where undeveloped land has been purchased, to commence construction on that land within 24-months or have the land compulsorily sold.