Property managers could be fined and jailed for two years if they help foreign investors flout proposed new rules.
The federal government has asked the public to comment on a new options paper that proposes to increase compliance on investors, developers and third parties such as property managers.
This would be done by creating a specialised investigative and enforcement area within the Australian Taxation Office, which would use its “sophisticated data matching systems” to detect potential breaches of the foreign investment rules.
Third parties such as property managers who help foreign investors breach rules could be fined $85,000, imprisoned for two years or both.
Foreigners or temporary residents who acquire new properties without approval could be fined $10,200 in the case of individuals and $51,000 in the case of companies.
Non-residents who acquire established property without approval, or temporary residents who acquire more than one established property without approval could be fined 25 per cent of the purchase price or market value of the property – whichever is greater.
Developers who fail to market apartments in Australia could be fined $85,000, imprisoned for two years, or both.
Foreigners or developers who fail to comply with reporting conditions associated with approval could be fined $42,500 in the case of individuals and $212,500 in the case of companies.
The government also wants to introduce application fees on foreign investment proposals.
The proposed fees on applications for residential real estate would be $5,000 for properties valued at less than $1 million and $10,000 for properties between $1 million and $2 million, with fees then rising in $10,000 increments for every $1 million extra of value.
The government said foreign investment generally benefits the economy, but that it reserves the right to reject proposals that are contrary to the national interest.
It also said there was “growing community concern” about foreign investment in residential real estate, “particularly in the context of rising house prices in major cities”.