Fairfax’s John Garnaut and Lucy Macken have revealed today that property investment advisers including a top tier law firm and one of the big four accounting firms are being investigated by the Australian Taxation Office (ATO) for facilitating illegal property sales to foreign nationals:
Officials concede that FIRB has never previously enforced foreign investment laws in relation to residential real estate.
The Tax Office, however, has put to use vast data banks and risk-screening systems that it usually uses to detect likely cases of tax avoidance.
Fairfax understands that officials expect to find high-risk investment cases are largely clustered around particular accountants, lawyers and other advisers…
The audit is being assisted by the addition of $37.2 million in last month’s federal budget, attributed over four years.
So, it would appear from the above that syndicates of accounting and legal firms are behind many of the sales of established homes to foreign nationals. Hopefully, the ATO will make an example of these firms and deal with them harshly.
More generally, shifting Australia’s compliance/surveillance regime governing property sales to foreigners to the ATO was one of the best things to come out of the O’Dwyer parliamentary inquiry into foreign investment.
Combined with stiffer penalties for breaking the rules – encompassing both buyers and third party facilitators alike – Australia’s regulatory regime looks to finally have teeth.
Now all we need is a series of prosecutions to follow, such that skirting the law becomes too risky for would-be buyers and agents. It’s early days, but things are at least pointing in the right direction.
