Five hundred overseas property buyers have been issued penalty notices and told to pay the Australian Taxation Office (ATO) $2.7m in fines.
According to the ATO, most of the breaches occurred in Victoria, New South Wales, Western Australia, and Queensland.
In December 2015, the federal government introduced a series of new penalties for foreign investors, including civil penalties supporting divestment orders, fines for third parties who knowingly helped foreign investors break the rules, and fees for foreign investment applications.
Since their introduction, 500 penalties have been issued for 700 offences, including failure to get Foreign Investment Review Board (FIRB) approval before buying. Penalties were also issued to parties who breached a condition of previously approved applications, such as temporary residents failing to sell their properties once their visas expired.
Other types of offences include temporary resident visa holders owning more than one property, Aussie companies controlled by foreigners owning multiple established properties, and failure to commence construction on vacant land or embarking on redevelopments within conditional time frames.
“Additional matters are currently in contemplation and due for approval shortly,” the ATO said in a statement.
The latest data shows that 60% of overseas buyers investigated were granted retrospective approvals (investors who received retrospective approvals did not apply to the review board before purchasing, but would have otherwise received approval). However, strict conditions are attached to retrospective approvals, with breaches resulting in civil penalties or criminal prosecution.
Overall, 20% of the properties and offences investigated resulted in a mandatory sale or self-divestment, said the ATO.
The findings are expected to be included in the FIRB’s annual report, which is due for imminent release.
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