The federal government has put property managers on notice after ordering a foreign investor to immediately sell a mansion.
Treasurer Joe Hockey announced yesterday that Golden Fast Foods now had 90 days to sell the Point Piper property that it “illegally” purchased last November.
“The property was bought illegally by Golden Fast Foods – which is ultimately owned by Evergrande Real Estate Group, a large company listed on the Hong Kong Stock Exchange – via a string of shell companies, including in Australia, Hong Kong and the British Virgin Islands,” Mr Hockey said.
“Under the Foreign Acquisitions and Takeovers Act 1975, foreign investors must notify the treasurer through the Foreign Investment Review Board (FIRB) before purchasing residential real estate. Golden Fast Foods is a foreign-owned company which failed to notify FIRB of its intended purchase.”
The government last week proposed changes to the foreign investment regime that could result in property managers being fined or imprisoned if they help overseas buyers flout investment rules.
There is no evidence that the Australian agency that organised the sale to Golden Fast Foods acted improperly in any way, and Residential Property Manager makes no such suggestion.
The mansion features six bedrooms, eight bathrooms and sits on 1,508 square metres, according to its listing from last year.
Mr Hockey said he made the divestment order following advice from the Australian government solicitor.
“We welcome all foreign investment that is not contrary to our national interest,” he said.
“Under Australia’s foreign investment policy, foreign investment should increase Australia’s housing stock.
“Non-resident foreign nationals cannot buy established dwellings as homes or investments.”
Meanwhile, the Property Council of Australia’s chief executive, Ken Morrison, has criticised the federal government’s plans to introduce fees on foreign investment applications.
“What is Australia’s policy on foreign investment? The federal government can’t seem to make up its mind,” Mr Morrison said in a statement, which preceded Mr Hockey’s announcement.
“They are saying that Australia is open for business and welcomes investment in new housing construction, while at the same time slapping a new tax on foreign investment on the housing supply they want to encourage.”
Mr Morrison said the fees will reduce buyer numbers and housing supply, thereby placing upward pressure on property prices.