Commentary on Political Economy

Monday, 21 December 2020

 

Dob-in hotline launched for foreign investment breaches

The federal government has launched a fresh crackdown on foreigners who break the rules on buying residential real estate, with a hotline to dob in suspected breaches.

The compliance campaign has been announced against a background of worsening relations with China, although the federal government has not detailed any specific escalation in foreign investment breaches in the housing market.

Treasurer Josh Frydenberg has urged those with information or concerns about suspected illegal ownership of residential real estate to dial into a confidential tip-off line run by the Australian Tax Office.

The so-called Tip Off campaign follows the introduction of stiffer penalties for infringements relating to residential land valued at over $5 million as well as new civil penalties and infringement notices for providing false or misleading information.

"Stronger and more flexible enforcement options will ensure that our foreign investment regime is able to respond to emerging risks and global developments," Mr Frydenberg said.

"While the majority of foreign investors act in good faith in complying with the law, Australians expect their government to maintain a high standard of enforcement in order to safeguard Australia’s national interest, businesses and the economy."

Five years ago, as concerns rose sharply about the potential impact of cashed up foreign buyers on spiralling property prices, former treasurer Joe Hockey famously dobbed in one of his neighbours over a suspected breach of the investment rules.

Foreigners who want to buy residential real estate in Australia generally need to apply for foreign investment approval. The rules apply to new
dwelling purchases, as well as vacant residential land for development and in some cases, established property.

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