The federal government has confirmed it is investigating hundreds of foreign buyer cases, with the Treasurer announcing another round of forced sales as part of the ongoing crackdown.
The federal government has 481 foreign buyer cases under investigation, with Treasurer Joe Hockey ordering the sale of five illegally held properties since his last update on residential real estate breaches.
Mr Hockey confirmed the details yesterday during a joint press conference with the commissioner of taxation, Chris Jordan.
“We have already announced seven divestments in relation to property. I can announce today that I have signed for the further divestment of property, including properties in Labrador, Qld, Ardross in WA, Elizabeth Bay in Sydney, Underdale in SA and Stretton in Qld – held by people from Singapore, Indonesia, the UK and China,” Mr Hockey said.
The investors linked to these properties came forward under the amnesty announced by Mr Hockey in May, and will therefore not be referred for criminal prosecution.
“The lowest value purchase price was $265,000, the highest $8.1 million. They have 12 months to sell the properties under the amnesty that we have provided until the end of November,” he added.
Around 3,000 pieces of information relating to suspected breaches of foreign investment regulations have come to light since the ATO took responsibility for investigations in May, Mr Hockey said.
Much of this information is the result of data matching with third-party sources including the Foreign Investment Review Board, Immigration, AUSTRAC and state and territory land title offices, according to Mr Hockey.
Mr Jordan explained that a majority of the cases under investigation had been instigated following tip-offs from concerned community members.
“The majority of those are community referrals, community dob-ins. So we’re going through those in a fairly systematic way. There are about 50 people already devoted from the ATO in this area. And we are bringing to bear our immense data analytics,” he said.
He acknowledged that the ATO was benefiting from tax-related leads, citing cases where individuals were acquiring multimillion-dollar properties but failing to declare income.
“When we look at the fees we get from immigration, the fees we get from AUSTRAC, getting information from all the land titles offices, running that against all tax returns; we are seeing examples of very young people who are here on maybe a student visa never having lodged a tax return, yet acquiring properties of say $5 million. This does cause us to have some spin-off benefits by being the Tax Office,” he said.
“We will be looking also – where’s the income if people have these places rented – how come you have not disclosed income? We will be looking closely at where the source of those funds have come from, checking to see whether it's previously untaxed income here in Australia or in the worst case, has it come from the proceeds of crime?”
Mr Jordan cautioned that the concessionary penalty regime ends in December and said the ATO would also be targeting those businesses involved in the illegal transactions.
“We will particularly be focusing our attention on third-party facilitators. No longer will the accountants, the lawyers, the buyers’ agents, the real estate agents be immune from activity because they will be subject to very strong civil and criminal penalties after 1 December. I am encouraging them to come forward because we will be focusing our attention there; a lot of these foreign nationals don't understand trusts or these blind trust complex corporate structures that the lawyers are putting them into to hide the real beneficial ownership of these properties."
He added: “So we will have a lot of specific attention against those third parties who knowingly facilitate the illegal acquisition of Australian real estate.”