New rules banning expats who illegally own property in Australia have come into force.
Starting from December 1, 2015, expats face a much tougher penalty regime for buying land and new homes in the country.
The government blames wealthy foreign buyers, mainly from Singapore, Hong Kong and China, for pushing up home values in recent years.
Earlier in the year, the government warned new laws to stop foreign investors grabbing affordable homes was on the way.
Foreign investors now need permission to buy land and new homes in Australia.
Jail and fines
Investors breaking the rules face jail sentences of up to three years. Individuals also face fines of up to £65,000 and companies could face fines of up to £325,000.
Divestment orders to strip foreigners of illegally purchased homes and land were also introduced alongside the strict penalties.
“The Australian government has always had a policy of warmly welcoming foreign investment providing the result was not a problem for our citizens,” said Treasurer Scott Morrison.
“In this case we feel property prices have been influenced by wealthy foreign investors to the detriment of our own citizens and that we should control this investment.
“We are not against overseas investment, because it brings wealth, jobs and other opportunities, but we feel we should exert more control on the property market.”
Morrison also explained that the divestment rules included seizing any capital gain made on illegally purchased property and fines for advisers or other parties helping foreigners break the new rules.
Property prices up
One issue the government has addressed is foreign investors buying up agricultural land.
To monitor ownership of farm and agricultural land more closely, the government has set up a new ownership register.
Any offshore investor holding farmland totalling more than £120 million will be referred for government investigation. The law has already been used to cancel the sale of a large cattle ranch to foreigners on the grounds that the disposal was not in the national interest.
Property prices in Australia have risen in recent years – and homes in the main cities of Sydney and Melbourne rival those of London and other world cities.
According to the official Australia Bureau of Statistics, house prices rose an average of 2% nationwide in September and 4.7% in each state capital.
