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The increased fines will provide an additional $2.3 million in revenue and ensure the housing market works as designed, says the government.
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Foreign investors face greater punishment for breaches
04 January 2023
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Global investors who breach Australia’s foreign investment laws for residential property will face increased consequences with the penalties being doubled from 1 January 2023.
In a joint release by the Treasury and the Ministry for Housing, the government said the increased penalties were to ensure the housing market worked as it was designed for everyone, not just overseas investors.
The penalty for a developer failing to advertise a new dwelling in Australia in breach of its exemption certificate would now be either or both imprisonment for 10 years and 30,000 penalty units for individuals equal to $6.66 million, or 300,000 penalty units for corporations equal to $66.6 million.
Those that fail to notify the Treasurer of an acquisition, hold prohibited interests in established dwellings, or breach conditions could now face a penalty whichever was the greatest of double the capital gain on the dwelling or 50 per cent of the market value of the interest in the land/dwelling.
The penalty for failing to comply with notice or vacancy fee return requirements also increased to 500 penalty units, which equals $111,000.
The release said the change was expected to provide an additional $2.3 million in revenue for the budget over the forward estimates.
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The increase in penalties for those that flaunted the laws meant it would be less likely that foreigners would break the rules, said the government, and if breaches did occur stricter consequences could be handed down.
The Treasury said the decision was part of the government’s plan to ensure foreign investors complied with their legal obligations in Ausltralia and taxpayers were compensated when overseas investors were found to have broken the law.
“We have a lot to offer global investors including strong institutions, transparent regulations and a highly-skilled workforce,” said the release.
“We welcome foreign investment in Australia because it plays a crucial role in Australia’s economic success and will continue to be important into the future.”
“We will always put Australian interests first, and that means ensuring Australians benefit from foreign investment here.”
The government said the increased penalties would also assist in tackling housing affordability and helping more Australians achieve home ownership with it being one step in its housing reform agenda.
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