On December 1, the Australian Government's "amnesty" for foreign investors in breach of foreign investment rules relating to residential property (foreign investment rules) came to an end. In its place are greater compliance powers for the Australian Taxation Office, higher federal government fees and tougher penalties for breaches.
In May, the government announced a seven month window giving foreign nationals who had purchased residential property in breach of foreign investment rules until 30 November 2015 to declare the breach and avoid a penalty. Foreign nationals who declared the breach and who remained in ownership of residential property in breach of the rules were required to sell within 12 months.
With the recent passage of the Foreign Acquisitions and Takeovers Legislation Amendment Act 2015 (Cth), Foreign Acquisitions and Takeovers Fee Imposition Act 2015 (Cth), and Register of Foreign Ownership of Agricultural Land Act 2015 (Cth) through Federal Parliament, as well as various pieces of new Regulation, important changes are now in effect and any investors in breach of the foreign investment rules, together with those who have assisted them, could face severe penalties.
A Bill was also recently introduced into Federal Parliament imposing a 10 per cent non-final withholding tax on payments made to foreign residents that dispose of certain taxable Australian property. Please click here to read more.
Snapshot of the new foreign investment regime
- Existing criminal penalties have increased to $135,000 or three years' imprisonment, or both for individuals. Previously, individuals faced a maximum penalty of $90,000. Companies violating the rules will now face fines of up to $675,000.
New application fee
- Foreign applicants wanting to buy a residential property will now have to pay an application fee. For a property valued at $1 million or under, the fee is $5000. For a property valued over $1 million, the application fee is $10,000. For each additional million dollars the home is worth, the application fee increases by $10,000.
Property developers and third parties beware
- Property developers and third parties also face strict punishments for breaching foreign investment rules. Developers with exemption certificates who fail to advertise their new dwellings in Australia in accordance with the conditions of that exemption certificate now also face a maximum fine of $135,000 or three years' imprisonment. Third Parties who knowingly assist foreign investors to breach foreign investment rules are now subject to civil and criminal penalties, including fines of up to $45,000 for individuals and $225,000 for companies. A third party includes those persons who might provide services to facilitate the transfer of interests such as stockbrokers, lawyers, conveyancers, real estate agents and other advisors.
In the media
Buildings Day: GBCA commits to net zero
The Green Building Council of Australia will introduce net zero certification for buildings from 2016, it has announced as part of the inaugural Buildings Day at COP 21 in Paris. The GBCA will push for increased minimum energy efficiency standards in the Building Code of Australia (04 December 2015). More...
NSW home approvals strong but dipping
The Australian Bureau of Statistics for October show that New South Wales home approvals are still strong but have been dipping over the last two months, says the Urban Taskforce (01 December 2015). NSW home approvals strong but dipping
Residential construction high in NSW but non-residential
The September Quarter Australian Bureau of Statistics construction figures for NSW indicate residential construction is strong but non-residential construction is slowing down (26 November 2015). Residential construction high in NSW but non-residential slowing down
Practice and courts
ABCB Fixture Unit Ratings and Warm Water
The ABCB is currently undertaking a number of plumbing code development and research projects two of which being Fixture Unit Ratings and Warm Water Systems. These consultations are now available for comment on the ABCB website. Submissions close: Fixture Unit Ratings discussion paper:27 November 2015; Warm Water Systems Report: 11 December 2015.
Announcements, Draft Policies and Plans released 2015
NSW BPB: More qualifications recognised under
The Building Professionals Board now recognises more qualifications as meeting accreditation requirements (04 December 2015) More qualifications recognised under Accreditation Scheme
NSW BPB: Comment by 14 December 2015: regulation of
A discussion paper on the regulation of manufactured homes is on exhibit until 14 December 2015 (04 December 2015) Comment by 14 December 2015: regulation of manufactured homes
ACT Builders Pty Ltd v Haridemos  NSWCATAP
CIVIL AND ADMINISTRATIVE TRIBUNAL- Appeal Civil and Administrative Tribunal (NSW) – whether grounds raise questions of law - s80, cl12 of schedule 4, whether decision fair and equitable – whether decision against the weight of the evidence – discretion to grant leave not enlivened – leave application refused Denial of fairness- evidence provided in re-examination Measure of damages- rectification of work not in accordance with contract More...
Black v Brereton  NSWSC 1781
APPEAL – statutory appeal – application for leave to appeal against a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal pursuant to s 83(1) of the Civil and Administrative Tribunal Act 2013 (NSW) – whether there are errors of law contained in the reasons for decision of the Appeal Panel – dispute regarding timber flooring ADMINISTRATIVE LAW – judicial review – whether the plaintiff is entitled to relief in the nature of prerogative writs – appeal dismissed. More...
Damien v JKAM Investments Pty Ltd  NSWCA
CONTRACT – respondent seeks to enforce alleged building work debt – identity of contracting entity in dispute – whether primary judge erred in finding that the appellant had contracted with Architectural Collections Pty Ltd (ACPL) – whether use of post-contractual conduct permissible - whether debt validly assigned by ACPL to the respondent PROCEDURE – whether primary judge erred by not allowing the appellant to tender email correspondence. More...
Nichols Constructions Pty Limited v Elphick  NSWSC
CIVIL – practice and procedure – separate question – whether appropriate – whether breach issues should be separated from all other issues. More...
Regulations and other miscellaneous instruments
Civil and Administrative Tribunal (Amendment No 3) Rule 2015 (2015-735) — published LW 4 December 2015
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