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Australian government introduces new foreign investment regime

The Australian government has just put a regime in place that was announced earlier this year to fine foreigners who illegally own property in the country.

The government in Australia is keen to protect against unlawful ownership of residential properties and is also going to be keeping a close eye on overseas purchases regarding its farmland.

Property prices have been on the increase for several years in Australia and the responsibility of this inflation has been placed on Chinese investors.

According to treasurer Scott Morrison, the government is still going to welcome foreign investment in Australia.

He has said: "Without foreign investment, production, employment and income would all be lower."

However, he continued on to say that the government's interest in foreign investment concerned monitoring it "to ensure that it benefits all Australians".

The new regime put forward by the government says that foreigners who have bought Australian property illegally will face three years in jail.

Alternatively in some cases, individuals who illegally buy Australian property will instead receive a fine of $135,500 and companies who do so will be fined $675,000.

The government will also be clamping down to make sure that people will not profit from their illegally acquired properties thanks to new civil penalties.

Mr Morrison has said that situations where these civil penalties will apply include "forfeiting any capital gains made on divestment of a property and fines for third parties who knowingly assist foreign investors".

Under the new regime, those who break the rules can expect to pay fees for the first time on foreign investment applications.

Concerns have also been raised about the amount of agricultural land passing into foreign hands and as a result a new farmland foreign ownership register has been established to regulate this information.

The register, monitored by the national Australian regulator, will audit the amount of farmland that is owned by a foreigner, to put a $15 million cap on their cumulative farmland investments.

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