Toothless ATO exposed as illegal foreign property buyers run riot

Back in December, a parliamentary committee into Managing Compliance with Foreign Investment Obligations for Residential Real Estate lambasted the Australian Tax Office (ATO) for failing miserably to enforce the rules precluding foreign nationals from purchasing established homes:

Despite at least 877 breaches of the country’s foreign ownership laws being uncovered in Victoria, the Australian Taxation Office has failed to land a single criminal prosecution since tough new laws came into effect more than three years ago…

Labor MP Julian Hill, the deputy chairman of the Public Accounts and Audits Committee, said it was “astonishing that there had been no prosecutions”…

A fortnight earlier, the parliamentary committee also revealed that not one intermediary facilitating illegal foreign sales (e.g. real estate agents, developers or conveyancers) had been prosecuted by the ATO.

Worse, in the case of the 316 forced disposals, the illegal foreign investors were allowed to keep the capital gains on the properties. So, there was zero downside from breaching the laws.

Today, a Sydney real estate agent has been exposed for selling several trophy homes for cash to anonymous Chinese buyers:

A Sydney real estate agent has admitted the ultimate buyer of four trophy homes was not a 32-year-old Chinese-born Australian, Zhang Bo, as shown on the title deeds…

Mr Zhang owns six properties in Sydney’s Mosman worth $37 million, but lives in none of them… Only one of the six houses held in his name appeared to be permanently occupied…

The agent who sold four of these harbourside houses, Richard Simeon, confirmed all were bought by different people, even though three of them are held through one company and all are linked to Mr Zhang…

Five of the six properties were settled without the need for a mortgage…

When asked on Sunday to provide context around his earlier comments, Mr Simeon said he had sold a huge number of properties to Chinese families in recent years. “I don’t know which people they are,” he said before hanging up once again.

There are two key problems here.

First, Australia has refused to implement global anti-money laundering (AML) rules pertaining to real estate gate keepers (e.g. real estate agents, accountants, conveyancers, etc).

This has left Australia with the weakest property AML rules in the world, and has opened the way for illegal money to gush through Australian real estate:

Second, despite having the ability to financially penalise illegal investment in established housing by foreign nationals, as well as third parties that knowingly assist foreigners to illegally purchase Australian homes, the ATO has failed to prosecute.

It is astonishing that the ATO can vigorously pursue small businesses and individuals for minor avoidance or errors in tax returns, but turn a blind eye to illegal foreign buyers scooping-up Australian homes, along with their enabling real estate agents.

When combined with its soft touch on AML rules, it is clear the Australian Government has little interest in actually policing illegal foreign buyers of real estate, and is complicit with the dirty money flooding into Australia’s homes and robbing young Australians of a housing future.

Comments

  1. Maybe someone should tell US troops that Australia maybe helping fund the bullets that kill you. Publicly embarrass the government. Anyhow this has been going on for years, there is no will to fix the problem, anything they say or do is to just deflect public anger and they will just move it to another department and say this time it will be different.

  2. GunnamattaMEMBER

    We have been doing this a long time.  Chodley Wontok was 6 and a half years ago, and it was happening well before then.

    Our ‘elites’ have still done absolutely nothing about foreign nationals illegally buying Australian real estate except put a 5k application on every permission going through FIRB – to prevent people pulling off another Wontok.  Have a prowl around the high rises of inner Melbourne or Sydney and there are loads on uninhabited apartments, and in the middle burbs of both cities there are more than a few homes owned by offshore types left empty…….

    Where the right to own in Australia was never verified by anyone to begin with

    Where the funds enabling the purchase are based in corruption in the originating country

    Non-existent man granted leave to buy $598,000 house
    https://www.domain.com.au/news/nonexistent-man-granted-leave-to-buy-598000-house-20130327-2gu0p/

    FIRB’s foreign property buyer fail https://www.macrobusiness.com.au/2013/03/firbs-foreign-property-buyer-fail/

    After all this time (after a senate inquiry, a Kelly O Liar investigation, and a trumpeted revamp of FIRB and its approach, the transfer of housing to the ATO and the ATO calling up 20 years worth of data), what has actually changed?

    • Think of it this way:

      A substantial part of our economy IS the housing market and all the ancillary jobs that are created with it.

      This part of the economy clearly contributes a substantial amount to the Commonwealth Treasury via tax receipts

      The people who regulate this sector are an arm of the government.

      All government jobs rely on tax receipts.

      Conclusion? Don’t bite the hand that feeds you.

      • It’s just another one of the “dumbest of the dumb” so-called export industries in which Australia excels. We can be world beaters (or at least the best in the Southern Hemisphere) in this arena because no other country would be so eye-wateringly stupid.

    • Yep nothing has been done, and nothing will be done under the Liberals for sure. Maybe under a Shorten Labor it would have, but not under an Albanese Labor it won’t either. We’re doomed (if young Australian)… I gave up trying to wait for sanity, rule of law etc..

      • Can’t we just change the name Australia to Potatoheadlandia seeing it no longer represents anything? Then we won’t have to bother being annoyed at our rapid destruction of culture and values.
        Potatoheadlandia named after the minister for bend over and drop your trousers.

  3. It’s been deliberately engineered, firstly they write laws with loopholes, then for added measure to ensure they don’t work the don’t provide any funding for enforcement. I remember firing off a email to Kelly O’Liar about a sale in my area when the tightening of ‘restrictions’ was done a couple of years ago , got the usual staff generated letter about how effected the new laws were, what a waste of time. I suppose if the fake left rent a crowd started protesting at some of the addresses mentioned, gluing themselves to the gates in protest about high housing costs in capital cities, you might see some media attention and some reactive action by this government. Surely they can get a bus from the Sydney uni area to Mosman?

  4. but again, if any party comes out claiming they will put a stop at this and go with such agenda to the next elections they are guaranteed to lose. All Scumo needs to say is “they will bring you house price down”. We sold our souls to the devil.

  5. This makes me very angry and feel absolutely helpless. These ato pricks need to be taken out behind the shed and given a bullet.

    I’m surprised this hasn’t received more traction as the rascist calls don’t stick to this issue as they do immigration.

    So turns out ATO is above the law.

  6. Astonishing? No it isn’t. It’s a directive.
    There was a reason why the current Commissioner was appointed.

    ✔ appoint a former cop and partner at big four accounting firm KPMG (thanks Wayne Swan)
    ✔ corporatise and sweep a broom through the APS getting rid of anyone that isn’t on board the blue tie express
    ✔ extend Mr Jordan’s term as Commissioner of Taxation until 2024 (thanks Scott Morrison)

    Meanwhile whistleblowers are crushed, automation and AI rages on, war on cash transactions, squeeze the SMEs, go after retail/hospitality, and always sink a boot into those pesky non-compliant tradies.

  7. Obviously to prosecute or hinder a foreigner corruptly ripping off or exploiting Aussies is just racist. I’m sure that’s in the ATO sensitivity training isn’t it. So we are screwed arnt we. Libs make profits from it so won’t touch it. Labor right make profits from it and won’t touch it. labor left think it’s racist so won’t touch it. Well done.

  8. Jumping jack flash

    Woohoo, more money from Hoocareswhere.

    It is actually the only way that our housing can make money for the country so we should embrace it.

    Besides, the interest on the last pile of debt that was attached to a house has to be paid somehow, otherwise the economy would be exactly that amount worse off than had the debt never existed.

    Its a vicious cycle, and one that can’t stop easily – in fact probably can never stop without dire consequences. We’re currently using ever-larger piles of debt and attaching them to the same houses to repay the interest of the previous pile of debt that was attached.

    If the debt doesn’t grow at least as fast as the interest rate (the actual interest rate, not the cash rate) then the whole thing sucks money out of the economy as interest repayments and we get all kinds of problems.

    Getting foreign buyers to cash into the game will reduce the amount of debt that is required for our debt slaves to take on to keep the debt ponzi rolling on.

    So embrace these foreigners, and thank them for their service.
    Maybe buy them a drink or offer to polish their shoes. We must make them feel welcome.

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