Australia cracks down on illegal home buying by foreigners

Australia has forced the sale of more than Aus$100 million (US$76 million) worth of residential property bought illegally by foreigners since it introduced a robust investment regime, the government said Monday.

Canberra established new rules in December 2015 to fine and even jail foreign nationals who flout laws that only allow them to purchase new dwellings, not pre-owned residential property.

Real estate prices have soared in recent years, particularly in Sydney and Melbourne, with housing affordability becoming a key political issue.

There are concerns that cashed-up foreigners, particularly from China, have helped inflate prices, forcing new potential homeowners out of the market.

Treasurer Scott Morrison said there had so far been 61 forced sales with a combined value of Aus$107 million, with another 36 people opting to sell while being investigated.

“The government is committed to enforcing our rules so that foreign nationals illegally holding Australian property are identified and their illegal holdings relinquished,” he said.

Chinese nationals dominated the list with 25 forced sales. Others came from countries including Britain, Malaysia and Indonesia.

Under the regime, foreigners who illegally buy Australian real estate face up to three years in jail or fines of Aus$135,500 for individuals and Aus$675,000 for companies. Capital gains are also forfeited on forced sales.

Australia has also intensified its scrutiny of overseas ownership of agricultural production amid concerns of valuable assets passing into foreign hands.

The government has blocked a handful of planned purchases in recent years as being against the national interest.