9 June 2015
Media Release - #2015055, 2015

Strengthened foreign investment rules already producing results

Just one month after the Government announced plans to strengthen foreign investment rules for residential real estate, the Foreign Investment Review Board (FIRB) already has 195 cases under investigation.

Of the 195 cases, 24 are foreign investors who have voluntarily come forward to identify that they may have breached the foreign investment rules.

The value of the properties in question range from the prestige market to real estate in the suburbs of our capital cities.

The FIRB is currently talking to one of those investors about a voluntarily divestment. The investor, from the UK, came forward regarding a property purchased for around $700,000 in Western Australia.

If the investor takes advantage of a voluntary divestment, it will be the second divestment since March.

Another 40 cases relate to referrals from the community where members of the public suspect foreign investors may have broken the rules by using complex structures and illegal leasing arrangements to hide foreign ownership.

As part of the reforms to strengthen the foreign investment rules, the Government transferred all residential real estate functions from Treasury to the Australian Taxation Office (ATO).

The ATO has the ability to cross reference its own data with third party sources, including FIRB, immigration, AUSTRAC and state and territory land title offices. The ATO has the capacity to cover more than 600 million transactions annually.

The ATO’s data matching program is already getting results. For example, they have identified one foreign investor who appears to be linked to over 10 properties ranging from a $300,000 unit to a house worth $1.4 million.

Foreign investors who think they may have broken the rules should come to us before we come to them.

They will still be forced to sell the properties, but will not be referred for criminal prosecution if they voluntarily come forward before 30 November.


Australia’s foreign investment rules generally do not allow foreign investors to purchase existing residential real estate.

While foreign investment is integral to Australia’s economy, it is important to uphold the integrity of the framework and ensure that foreign investment is not contrary to our national interest.

We need to make sure that all foreign investors are following the rules, and that those foreign investors who break the rules are not able to profit from breaking the law.

From 1 December 2015, foreign residents who unlawfully purchase established residential property will face increased criminal penalties up to $127,500 or three years imprisonment for individuals and up to $637,500 for companies.

Divestment orders will be supplemented by civil pecuniary penalties and infringement notices for less serious breaches.

The Government will also ensure that people who break the rules do not profit by introducing a civil penalty to capture any capital gain made on divestment of a property.

Third parties who knowingly assist a foreign investor to breach the rules will also be subject to civil and criminal penalties, including fines of $45,000 for individuals and $225,000 for companies.