Kelly O'Dwyer looks at fining estate agents, lawyers and accountants under new FIRB rules

Kelly O'Dwyer looks at fining estate agents, lawyers and accountants under new FIRB rules
Kelly O'Dwyer looks at fining estate agents, lawyers and accountants under new FIRB rules

Despite very clear rules and very clear prohibitions, the Foreign Investment Review Board had failed to enforce laws restricting investment in real estate by foreign investors, Kelly O'Dwyer maintains.

The prominent Coalition MP Kelly O’Dwyer, currently chairing a federal inquiry into housing affordability and the influence of foreign ownership, told 2GB Money News the FIRB had been "asleep at the wheel".

"There has been not one prosecution since 2006," she told 2GB's Ross Greenwood, adding to earlier comments made at forum hosted by Bloomberg News in Sydney on Tuesday.

O’Dwyer, who is due to provide the report with recommendations to Treasurer Joe Hockey in October, says the committee is looking at stiffer and wider penalties for non-compliance.

"The FIRB haven't been properly doing the job…. in terms of the compliance and enforcement regime."

Adding that if foreign buyers feel there is no penalty for non-compliance, "then they are going to take the risk because the upside is so so very very large."

"They can keep the windfall gain they might make.

"Why should some one who has done the wrong thing be able to benefit financially?

"We are looking at a civil penalty regime that would apply to people who contravene the rules," she said.

She said the committee was told some foreign buyers viewed the potential of the current fine, of $85,000, as potentially merely the "cost of doing business".

"I should infact hurt if you do the wrong thing," she told 2GB, adding the committee was looking at introducing fines on a sliding scale based on the property price.

"At the moment the only penalties that really apply are to the actual purchaser themselves, but in fact what we think applicable is catching a number of those people who might deliberately be helping those people contravene the laws, so looking potentially estate agents, lawyers and also accountants involved in trying to contravene the foreign investment framework."

The FIRB testified to the committee that it had only eight staff dedicated to reviewing thousands of foreign purchases of residential real estate.

 

 

 

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.

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