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Australia has ordered the sale of 15 properties illegally acquired by overseas buyers as part of the government’s crackdown on breaches of its foreign investment laws.
The properties are located in Victoria and Queensland and have a combined purchase price of more than $14 million , Treasurer Scott Morrison said in a statement Monday. They range in value from $140,000 to $5.9 million.
The government has been under growing pressure to show foreign-ownership rules are being followed amid concern overseas buyers are helping fuel Australia’s property boom – housing prices in the nation’s largest cities have surged almost 50 per cent since 2008, according to the Australian Bureau of Statistics.
Treasurer Scott Morrison. Photo: Alex Ellinghausen
The foreign owners came from countries including China, India, Indonesia, Iran, Malaysia, the U.K. and Germany. The forced sales include the $5.9 million home in Rockbank, Victoria, acquired by an Indian buyer, and a $1.1 million property in Doncaster, Victoria, bought by a Chinese national. Eleven of the properties were purchased for less than $500,000 each.
Monday’s announcement brings the total of forced sales since the crackdown started two years ago to 61, with a combined value of $107 million. An additional 36 foreigners sold properties during the course of the Australian Taxation Office’s investigations, the government said. The breaches were identified using data-matching programs and tips provided by the public.
The forced sales underscore the government’s “determination to enforce our rules so foreign nationals illegally holding Australian property are identified and illegal holdings relinquished,” Morrison said in the statement.
A Treasury working paper published in December said “only a small proportion” of the increase in housing prices should be attributed to foreign demand.
Since 2010, offshore buyers have only been allowed to purchase new properties after gaining government approval, and can’t buy existing homes. A 2014 report by a parliamentary committee found these rules were only being laxly enforced.
This story was first published by Bloomberg.