Hundreds of foreign investors under investigation

The federal treasurer made the revelation yesterday while trumpeting the success of the government’s stronger foreign investment regime, which it unveiled in last month’s Budget.

Mr Hockey said one reason for the success is that all residential real estate functions have been transferred from the Treasury to the Australian Taxation Office, which has the ability to cross-reference its own data with third-party sources.

“The ATO has the capacity to cover more than 600 million transactions annually. The ATO’s data-matching program is already getting results,” Mr Hockey said.

“For example, they have identified one foreign investor who appears to be linked to over 10 properties ranging from a $300,000 unit to a house worth $1.4 million.”

The ATO is able to check data from the Foreign Investment Review Board, the immigration department, state land title offices and federal financial intelligence unit AUSTRAC.

Mr Hockey said the Foreign Investment Review Board currently has 195 cases under investigation.

“Of the 195 cases, 24 are foreign investors who have voluntarily come forward to identify that they may have breached the foreign investment rules,” he said.

“The value of the properties in question range from the prestige market to real estate in the suburbs of our capital cities.”

Mr Hockey said the Foreign Investment Review Board is talking to one of those investors about a voluntary divestment.

This UK investor came forward regarding a property purchased for about $700,000 in Western Australia, according to Mr Hockey.

“Another 40 cases relate to referrals from the community where members of the public suspect foreign investors may have broken the rules by using complex structures and illegal leasing arrangements to hide foreign ownership,” he said.

“Foreign investors who think they may have broken the rules should come to us before we come to them.

“They will still be forced to sell the properties, but will not be referred for criminal prosecution if they voluntarily come forward before 30 November.”