Furthering the crackdown surrounding anti-money laundering rules in foreign investment, the government is considering relying on real estate agents to report suspicious purchases by foreign buyers.
The joint public accounts and audit committee is reviewing the deficiencies in data around the foreign investment regime, with the ATO announcing on Wednesday they had conducted 4600 investigations into potential breaches since 2015.
Of those 4600 investigations, 1500 breaches of the property ownership rules have been identified.
Fines to date have totally more than $7 million.
The current restrictions see foreign investors being forced to gain approval before buying in Australia. Existing properties are banned from being purchased by foreign buyers, leaving them only new builds.
ATO deputy commissioner Mark Konza said at a committee meeting that formal disposal orders have been issues for 75 properties since 2015, totalling a combined $135 million.
A further combined $150 million worth of property has been sold in voluntary disposals by foreign investors around the country.
The crackdown on foreign buyers was first announced in the 2015-16 budget by the Turnbull government, and in June the Australian National Audit Office announced was still in the process of becoming effective. The delay is thought to be caused by data collection, and the challenges being faced by the ATO in sourcing reliable information.
At this stage, agents are not required to report suspicions of possible breaches. However, the obligation falls to the purchaser to do the right thing where the laws are concerned, which brings into debate whether agents have an obligation to report potential breaches as part of an ethical code of conduct.
It’s now being considering if mandatory reporting rules should be introduced to ensure agents are forced to monitor for suspicious purchasing activity.
The debate follows the release of figures earlier this month from Juwai.com which showed that investment from Chinese buyers had dropped by 26.8 per cent between 2016 and 2017.
Chinese buyers purchased $23.9 billion of Australian real estate in 2017.