How e-Conveyancing can help ensure foreign investors comply with rules: REIA

How e-Conveyancing can help ensure foreign investors comply with rules: REIA
Jennifer DukeDecember 7, 2020

Is e-Conveyancing going to be a way of ensuring that foreign nationals comply with Australian foreign investment rules?

The Real Estate Institute of Australia suggests that this might be exactly the case.

As part of the House of Representatives Standing Committee on Economics’ public hearings into the Inquiry into Foreign Investment in Australian real estate, REIA board member First National's Ray Ellis is to address the inquiry and detail the possibility of using e-Conveyancing to improve compliance.

This would ensure greater inter-departmental and agency communication, including with the Department of Immigration, with REIA CEO Amanda Lynch noting that later in the year the first national e-Conveyancing platform will be rolled out.

“While it is important to stress that the new online platform is heavily regulated with keen focus on protecting privacy of individuals, it will be capturing a rich set of data including identification where the transaction involves foreign nationals,” said Lynch.

“Lawyers and conveyancers will have to verify the identity of the clients they represent and reflect the client’s foreign residency status while filling the form in an online workspace,” she said.

They will reflect the paper versions of transfer in each state and territory, with the same data fields, however will store data electronic – something that matches the expectation for 85% of all property transactions over the next two years to be electronic, explained Lynch.

Monitoring could more easily be undertaken under this system.

“The transition towards e-Conveyancing provides the opportunity for easier detection of irregular activity,” said Lynch.

“The last thing that the sector wants to see is unnecessary red tape around foreign investment in Australia and here is an ideal platform that is available for all property purchases, not just those involving foreign investment,” she said, noting the REIA supports both foreign investment in Australia, and the current guidelines.

Ellis noted that the issue isn't that foreign investment happens, but that it is inadequately monitored and regulated.

"Australia has long depended upon migration and foreign investment. It’s vital to a thriving economy in a country with a comparatively small population," he said.
 
"However, there appears to be evidence that some wealthy foreign investors have been purchasing existing homes and leaving them vacant to avoid detection by the Foreign Investment Review Board (FIRB)."

He noted that there is currently an $85,000 fine for breaching this law.

"Foreign developer investment, when compliant with our laws, creates jobs and benefits the construction industry. However, if foreign residential property investors believe they can buy existing properties and leave them vacant, to avoid detection, this is clearly against the rules and objectives of the FIRB scheme and measures should be put in place to address this cavalier attitude," he said.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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