A foreign investor has been penalised for purchasing multiple properties in Melbourne without receiving permission from the Foreign Investment Review Board.
The ATO filed proceedings in relation to 6 contraventions of the Foreign Acquisitions and Takeover Act 1975 (FATA) by the investor, who had purchased 4 properties without permission and simultaneously owned 2 established properties. The purchases were identified as part of the ATO’s multi-faceted approach for detecting non-compliance with the foreign investment rules.
Foreign persons are required to apply for approval before acquiring residential real estate in Australia under the FATA. Breaches of the FATA may result in civil penalties amounting to the capital gain made or 25% of the market value of the relevant property, whichever is greater.
ATO Assistant Commissioner Keir Cornish welcomed the decision as the first penalty order under the FATA and said that it served as a clear deterrent.
Sources: ATO, Residential real estate purchases by foreign investor attract $250,000 penalty, [media release], 11 April 2022; FC of T v Balasubramaniyan  FCA 374, 8 April 2022, accessed 11 April 2022.