Lawyers threatened with tough penalties
A parliamentary report has called for lawyers to be fined if they knowingly help foreign property buyers avoid new rules.
In a 119-page report tabled in parliament yesterday, the House of Representatives Standing Committee on Economics made 12 recommendations that could see a regulatory overhaul of enforcement and penalties to curb foreign buyers, including a mandatory application fee, a national register and greater surveillance of the funding sources of certain foreign nationals.
The committee led by Liberal MP Kelly O’Dwyer, who was a lawyer prior to entering politics, recommended that the government introduce a civil penalty regime for breaches of the foreign investment framework as it applies to residential real estate.
“Third parties (such as real estate agents, lawyers or accountants) who knowingly assist a foreign investor to breach the framework as it applies to residential property should also be subject to a civil and criminal penalty," the committee said in its report.
Penalties would be calculated as a percentage of the property value “to act as an effective deterrent”, according to the report.
The committee also noted that the sources of financing used by some foreign nationals to purchase residential real estate in Australia are a potential concern, including the possibility that shadow banking may be involved in some cases.
“The extent of this issue is uncertain but it would be prudent to ensure that any transactions involving an overseas purchase of an Australian property can be thoroughly investigated if considered suspicious,” the report recommended.
“This should be an area that is considered when the review into anti-money laundering legislation is finalised in 2015.”
As a result, the committee considered that it would be desirable for the Treasury and Foreign Investment Review Board to use law enforcement data where applicable, as part of its internal screening processes of foreign purchases of real estate.