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$5 million purchase caught in foreign investment crackdown

By Staff Reporter
9

The federal government has announced it has ordered the sale of a further seven illegally-held residential properties, as it warns foreign investors that the amnesty period for disclosure is fast approaching.

Houses ranging in value from $154,000 to over $5 million are the latest to be caught up in the federal government’s ongoing foreign investment crackdown, according to treasurer Scott Morrison.

The treasurer announced today that he has ordered the sale of seven more residential properties found to have been in breach of foreign investment restrictions.

"The seven residential properties are located across Victoria, New South Wales and Queensland. Their purchase prices ranged from $154,000 in Bellingen, NSW to more than $5 million for a house in the Melbourne suburb of Hawthorn East,” Mr Morrison said.

According to Mr Morrison, the Hawthorn East property was found to have been bought without government approval after an investigation by the Australian Taxation Office (ATO) – the first since the ATO was handed responsibility for such investigations earlier this year.

According to Mr Morrison, the other cases were less clear-cut.

"Other existing residential property purchases had been initially compliant but were subsequently held in breach of the foreign investment rules as a result of changed circumstances, and shall also be divested,” he explained.

Five of the seven properties are located in Melbourne, three of them in the inner-city suburb of Carlton. 

The owners of the seven properties will not face criminal prosecution and have 12 months to divest – part of the reduced penalty period announced by the government in May.

Mr Morrison used the announcement to provide an update on the number of cases currently under investigation, 532, and to remind foreign investors of the looming deadline for reduced penalty disclosures.

"Time is running out for foreign investors to voluntarily come forward if they have purchased established residential real estate without notifying the Foreign Investment Review Board. They have until 30 November 2015 to come to us before we come to them,” he said.

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