Robust new foreign investment rules are coming into effect, with those who breach them facing tough penalties.
Treasurer Scott Morrison says foreign investment is welcome in Australia provided it is not contrary to the national interest, and it needs to be appropriately monitored.
Mr Morrison says changes coming into effect on Tuesday follow passage of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 which provides greater compliance powers to the Australian Taxation Office and introduces strict new penalties.
Under a period of grace, foreign investors in breach of residential real estate rules had a short period to come forward and face reduced penalty period.
“From today any investors caught in breach of the rules will face severe penalties,” he said in a statement released early.
Mr Morrison said the ATO had taken full responsibility for enforcing residential real estate purchases by foreign citizens.
Existing criminal penalties had been increased to $135,000 or three years jail or both for individuals. Companies face fines of up to $675,000.
Mr Morrison said new civil penalties supporting divestment orders and ensuring those who break the rules do not profit also come into effect.
These include forfeiting any capital gains made on divestment of a property and fines for third parties who knowingly assist foreign investors to break the rules.
“Under these new arrangements foreign investors who fail to comply with the foreign investment rules will not be able to profit from doing so,” he said.
Mr Morrison said this also improved scrutiny and transparency around foreign ownership of agricultural production.
He said a new agricultural land foreign ownership register has been established with the screening threshold for proposed private foreign purchases reduced to $15 million.
Direct interests in agribusinesses valued at $55 million or more will also be screened by the Foreign Investment Review Board.
“The legislative package passed by the Senate last week represents the most significant reforms to Australia’s foreign investment framework in 40 years,” he said.