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Australias foreign investment policy for residential real estate is designed to increase Australias housing
stock, but lack of enforcement over recent years has threatened the integrity of the framework.
We will enforce the rules, ensuring that all foreign investors follow the rules and dont profit from breaking
them.
The Government will introduce legislation into Parliament in the Spring Sittings to ensure that the reforms
will commence on 1 December 2015.
There will also be increased scrutiny around foreign investment in agriculture and increased transparency on
the levels of foreign ownership in Australia through a comprehensive land register.
Further information on the agricultural changes, fees and the penalty regime is attached.
2 May 2015
2
www.pm.gov.au
Stronger enforcement of the existing foreign investment rules by transferring all of the
residential real estate functions to the Australian Taxation Office (between now and
1 December 2015). The Australian Taxation Office will improve compliance and
enforcement through sophisticated data-matching systems and specialised staff with
compliance expertise.
2.
Stricter penalties that will make it easier to pursue foreign investors that breach the
rules.
The existing criminal penalties (which will be increased from $85,000 to $127,500
for individuals) and divestment orders will be supplemented by civil pecuniary
penalties and infringement notices for less serious breaches of the residential real
estate rules.
Third parties who knowingly assist a foreign investor to breach the rules will also
now be subject to civil and criminal penalties.
3.
Application fees to ensure that Australian taxpayers no longer have to fund the cost of
administering the screening of foreign investment applications.
4.
5.
6.
From 1 March 2015, the screening threshold for agricultural land was lowered from
$252 million to $15 million (cumulative).
From 1 December 2015, a $55 million threshold (based on the value of the
investment) for investments in agribusiness will be introduced.
The Government is in negotiations with the states and territories to use their land
titles data to expand the register to include all land (including residential real
estate).
Criminal Penalty
Civil penalty
Maximum civil penalty of:
Individual 250 penalty units ($42,500)
Company 1,250 penalty units ($212,500)
Tier 1 Infringement notice Voluntary complied by coming
forward
Individual 12 penalty units ($2,040) plus the relevant application fee.
Company 60 penalty units ($10,200) plus the relevant application fee.
Tier 2 Infringement notice Identified through compliance
activities
Individual 60 penalty units ($10,200) plus the relevant application fee.
Company 300 penalty units ($51,000) plus the relevant application
fee.
Either an infringement notice or civil penalty would be sought but not
both.
Civil penalty
Maximum civil penalty, the same as the primary breach, of:
Individual 250 penalty units ($42,500)
Company 1,250 penalty units ($212,500)
Criminal Penalty
Knowingly assisting another person to commit a criminal offence is an
offence under Section 11.2 of the Criminal Code (maximum penalty is
the same as the primary offence).
Penalties for breaches of rules which apply to the business and agriculture investments
Foreign person makes an
acquisition without approval
(approval would normally have been
granted)
There is currently no civil pecuniary penalty under the Act for knowingly
assisting breaches of the Act.
Civil penalty
Maximum civil penalty, the same as the primary breach, of:
Individual 250 penalty units ($42,500)
Company 1,250 penalty units ($212,500)
Criminal Penalty
All investors
(unless exempt)
Type of acquisition
Previous threshold
New threshold
Residential properties
valued at $1 million or
less
$0
$0
$5,000
Residential properties
valued at greater than
$1 million
$0
$0
Advanced off-the-plan
certificates
$0
$0
Annual Programs
$0
$0
Type of acquisition
Previous
threshold
New threshold
Privately owned
investors from
FTA partner
countries that
have the higher
threshold
Developed commercial
real estate (including
heritage-listed
properties)2
$1,094 million
(indexed annually)
$1,094 million
(indexed annually)
$25,000
Vacant commercial
land
$0
$0
$10,000
Business acquisitions
in non-sensitive
sectors2
$1,094 million
(indexed annually)
$1,094 million
(indexed annually)
Business acquisitions
in sensitive sectors3
$252 million
(indexed annually)
$252 million
(indexed annually)
Application fees are indexed by the consumer price index on 1 July annually.
Free Trade Agreement partner countries the higher threshold currently applies to investors from the
US, NZ, Japan, Korea and Chile. It will also apply to Chinese investors once the China-Australia free trade
agreement enters-into-force.
2
Type of investor
Type of acquisition
Previous
threshold
New threshold
Rural land
$1,094 million
(indexed annually)
$1,094 million
(indexed annually)
for US, NZ and
Chile.
$15 million
(cumulative) for
China, Japan and
Korea.4
Agribusinesses
$1,094 million
(indexed annually)
$1,094 million
(indexed annually)
for US, NZ and
Chile.
$55 million
(indexed annually)
for China, Japan and
Korea.5
Type of investor
Type of acquisition
Previous
threshold
New threshold
Privately owned
investors from
non-FTA
countries and
FTA countries
that do not have
the higher
threshold
Developed commercial
real estate
$55 million
(indexed annually)
$25,000
Heritage-listed
developed commercial
real estate
$5 million
$5 million
$25,000
Vacant commercial
land
$0
$0
$10,000
Business acquisitions
in (sensitive and
non-sensitive sectors)
$252 million
(indexed annually)
$252 million
(indexed annually)
The prescribed sensitive sectors (where the higher screening threshold does not apply) are: media;
telecommunications; transport; defence and military related industries; and the extraction of uranium or plutonium
or the operation of nuclear facilities.
4
The $15 million cumulative threshold took effect on 1 March 2015.
5
The $55 million threshold will take effect from 1 December 2015.
6
Application fees will be indexed by the consumer price index on 1 July each year.
Type of investor
Type of acquisition
Previous
threshold
New threshold
Rural land
$252 million
(indexed annually)
$15 million
(cumulative)4
Foreign
Government
Investors
Agribusinesses
$252 million
(indexed annually)
$55 million
(indexed annually)5
$0
$0
New business
proposals
$0
$0
$10,000
Interests in land
(including rural land)
$0
$0
Consistent with the commitments in the Singapore and Thailand free trade agreements.
AGRICULTURAL INVESTMENTS
Scope of agribusiness
definition