Following on from the announced raft of fees for foreign home owner applications, starting from $5,000 for properties under $1 million, strong action is being undertaken to enforce the foreign home investor compliance, with the regulation of foreign investment passing to the Australian Taxation Office.

Foreign investors who illegally buy Australian homes face criminal penalties of $127,000 for individuals to $637,500 for companies. Developers and others who knowingly assist foreign investors to break the rules, face lesser fines of $42,500 for individuals and $212,500 for companies.

Authorities are currently investigating around 100 cases of foreign owners breaking the rules by buying existing residential property as opposed to new residential property. As a sign of the focus to step up action in this area, a shelf company associated with a Chinese billionaire was recently given 90 days’ notice to divest a Sydney mansion valued at $39 million.

The Government has a difficult balance to maintain between maximising capital investment flows into Australia whilst at the same time attempting to protect national interests.