The first penalty order for breaches of Australia’s foreign investments rules has been issued by the Federal Court of Australia, attracting $250,000 in penalties. The foreign investor has been penalised for purchasing multiple properties in outer Melbourne without receiving permission from the Foreign Investment Review Board.
The foreign investor purchased 4 properties without permission and simultaneously owned 2 established properties at once, in contravention of the Foreign Acquisitions and Takeover Act 1975.
Foreign investors are limited in the type of residential property they can acquire in Australia and must apply before doing so. Foreign investors found to be in breach of the Foreign Acquisitions and Takeover Act face civil penalties to enable the government to recapture capital gain or 25% of value of the property, whichever is greater.
Source: Residential real estate purchases by foreign investor attract $250,000 penalty, [ATO media release], dated 11 April 2022.
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