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Real estate industry welcomes crackdown on illegal foreign buyers

Property developers, construction and real estate industry heads have voiced broad support for measures to impose better policing and harsher penalties on the foreign investment industry.
Despite community concerns that foreign buyers have been pushing up local house prices, a parliamentary inquiry recommended the current framework encouraging foreign investment remain untouched.

There are 12 recommendations in the report, including a fee of between $500 and $1500 on foreign buyers; civil penalties for buyers and any lawyers, accountants or real estate agents who breach the rules; and the current fine of $85,000 to be replaced by a pecuniary penalty calculated as a percentage of the property value.

Meriton managing director Harry Triguboff said it was a diligent review of foreign investment industry. Meriton managing director Harry Triguboff said it was a diligent review of foreign investment industry. Photo: Rob Homer.

“Foreign property investment is incredibly beneficial in terms of creating jobs, economic prosperity and increasing housing supply, and Australians get that, but clearly there is a data problem and with the due processes of policing it all at the Foreign Investment Review Board,” said the chair of the House Economics committee, Liberal MP Kelly O’Dwyer.

Among the recommendations tabled in parliament on Thursday is a national register of land title transfers that records the citizenship and residency status of all foreign buyers.

Amanda Lynch, chief executive of the Real Estate Institute of Australia, congratulated the committee for moves it expects will bring more transparency to the market and “instil confidence” among Australians in foreign purchases.

“The bottom line is a fee of up to $1500 to fund the better policing of the legislation won’t discourage foreign investment and if you’re intentionally doing the wrong thing then you should be in trouble,” said Harley Dale, the chief economist of the Housing Industry Association.
However, Juwai.com co-chief executive Simon Henry expressed concern the fee would be payable by overseas buyers every time they apply to buy a property, “even if through no fault of their own they fail to buy it”.

Ms O’Dwyer confirmed it is recommended that the fee be payable per purchase application.
While Meriton managing director Harry Triguboff said it was a diligent review of foreign investment industry, Urban Taskforce chief executive Chris Johnson warned that any administrative reforms must not slow down investment and housing production.

“These reforms may well be desirable but they must not become so onerous for the applicant that we see a slowing down of foreign investment.”
Buyers’ agent Patrick Bright, from EPS Property Search, was less enthusiastic. “The government is also clearly putting the interests of developers ahead of everyday Australians,” he said.
The current rules stipulate that foreigners or short-term visa holders may only buy off-the-plan or new dwellings or vacant land for development, but temporary residents, such as students studying in Australia, may buy an established home to live in while they are here.
Foreign companies are also often permitted to buy established property for housing Australian-based staff.

Recent Treasury figures show there was a spike in Foreign Investment Review Board approvals in the nine months to March to a record high of $24.8 billion, 44 per cent higher than the $17.2 billion approved for the preceding 12 month period.

(Culled from  canberratimes.domain.com)

November 28, 2014

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