A 2010 change in guidelines to limit offshore investors in Australian housing to off-the-plan developments has failed to curb foreign interest in the local market and has led to no prosecutions so far, according to The Australian.
The report suggested that lawyers and relatives have been called upon to ensure overseas investors can sidestep the rules as industry experts tell a House of Representatives economic committee that most foreign investors consider the $85,000 fine for any breach as the “cost of doing business”.
“There have been no prosecutions since 2010 under the upgraded scheme, whereas prior to this there were, on average, one or two a year,’’ the Real Estate Institute of Australia said in a submission to the committee’s inquiry into foreign investment in Australian property, The Australian reported.
Among loopholes being used included wealthy offshore investors allowing newly bought property to sit vacant to reduce the likelihood of a Foreign Investment Review Board review.