Australia has sought to cool its overheating property market by introducing tough penalties for foreign investors who buy homes illegally.
Those found to have breached the country’s investment laws will face three-year jail terms and fines of as much as A$637,500 (US$500,400), the Wall Street Journal reported.
Prime Minister Tony Abbott said that the government remains “pro-business and pro-investment” but that investment rules must ensure “that the foreign investment we need really is in Australia’s national interest”.
“There is no doubt that if we have foreigners illegally coming into the existing residential property market, that is driving up prices,” Mr. Abbott said. “What we want to do is to ensure that illegal foreign investment is not unnecessarily driving up prices.”
The new rules, including a new application fee, will take effect from December.
Australians complain that wealthy Asian investors have been bidding up prices and making the property market increasingly unaffordable.
House prices in Sydney alone have risen 14.5 percent in the year to April, the newspaper said, citing data from industry data provider Corelogic RP Data.
Chinese are the biggest foreign investors in Australia, spending A$12.4 billion on the country’s real estate in the last financial year.
Australian laws allow foreigners to only buy homes being developed and not those already built, but many foreigners appear to be circumventing the rules.
In March, the government ordered the resale of a Sydney waterfront mansion illegally purchased by a Chinese-controlled company, the report said.
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