$5.2 million Hawthorn East home among five facing ATO-FIRB compulsory sale orders from Treasurer Scott Morrison

$5.2 million Hawthorn East home among five facing ATO-FIRB compulsory sale orders from Treasurer Scott Morrison
$5.2 million Hawthorn East home among five facing ATO-FIRB compulsory sale orders from Treasurer Scott Morrison

A mainland-based Chinese tycoon is the latest being ordered to dispose of his illegally-owned Australian home with the $5.2 million Hawthorn East property being the first Melbourne divestment order.

It comes from Treasurer Scott Morrison who ordered the sale of the mansion after the owner was caught breaching Australia’s foreign ownership laws.

The property is one of five in Melbourne that will be forcibly sold after investigations by the Australian Taxation Office, according to the Herald Sun.

The five bedroom Tudor-style house on 1455 sqm at 6 Higham Rd, Hawthorn East, (above) was purchased at Kay & Burton auction on May 31 last year. There were three bidders after the $4.2 million opening bid.

With Westpac funding, Li Jian Guo used $300,000 bids to knock out rivals at the auction. It had previously sold in 1988 at $940,000 when bought by the Karkar family.

Treasurer Scott Morrison said the house was bought without approval. The Herald Sun advises the owner drives a Bentley.

Mr Morrison has ordered four other properties to be sold off, after their overseas owners were found to be holding them ­illegally.

They are an $802,000 house at Springvale and three Carlton properties worth $225,000, $235,000 and $585,000.

The Springvale home and the most expensive Carlton property are owned by mainland China buyers.

The two smaller properties are owned by Hong Kong buyers.

Several properties, ­including Villa del Mare, a $39 million ­harbourside mansion in Sydney, have been ordered to be sold off under an Abbott Government FIRB enforecement crackdown that has continued into the Turnbull era.

Some 125 foreign investors have taken up an amnesty from the Australian Tax Office to declare their unauthorised ownership of real estate in Australia, according to documents obtained by Guardian Australia under a freedom of information request by the website.

The 125 investors have declared their status ahead of the FIRB deadline expiring on 30 November, the documents show.

A spokeswoman for the ATO repeated it had separately identified about 500 potential breaches of foreign investment laws it was investigating, a number of them from these disclosures.

Breaches of Australia’s foreign property investment laws prompted former Treasurer Joe Hockey to announce in September five forced sales of properties purchased by overseas buyers.

The former Treasurer then said 500 FIRB investigations are underway into more than $1 billion worth of residential real estate.

Tax commissioner Chris Jordan announced the investigations at a press conference with Joe Hockey.

They advised the properties to be sold are in Labrador on the Gold Coast, Ardross in Perth, Sydney’s Elizabeth Bay, Underdale in Adelaide and the Brisbane suburb of Stretton.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Hawthorn Firb

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