Estate agents will soon be on frontline of FIRB surveillance

Estate agents will soon be on frontline of FIRB surveillance
Estate agents will soon be on frontline of FIRB surveillance

Getting the signature on the property sales contract is the major focus of estate agents.

They and their vendors have only ever had peripheral interest in the money trail, and even less regard for the buyer's country of origin.

Some agents suggest under the Privacy Act they actually have no authority to ask for such details of a prospective purchaser.

And honest buyers are often shy in being forthcoming, while others simply set out to be outright deceptive.

But the civil fines estate agents soon face under proposed Federal Government legislation will change some of that disregard.

Foreigners are barred by law from buying established residential property unless they are temporary residents, and in that case, must sell when they leave the country. 

But illegal residential property sales and retention have been inevitable - and mostly under the radar - under the current negligible enforcement system, the Foreign Investment Review Board chairman Brian Wilson recently admitted, saying a national register for property transactions was needed.

Be it a $265,000 illegal purchase, as identified by Treasurer Joe Hockey, or the recently sold $39 million Point Piper trophy home.

Some are bought by overseas buyers whose children typically call the vast mansion their home while studying, but more often these home are just left empty, much to the neighbourhood's consternation.

Keeping track won't ever be easy as there are about 11 million residential dwellings in Australia, and about 600,000 property transfers every year.

Soon estate agents and and perhaps more significantly, solicitors will be at the frontline of surveillance.

Rather than turn a blind eye, they will incur fines in the face of illegality.

Not all estate agents will be worse off.

After-all the new penalties regime includes stronger re-sale powers - even capturing any capital gain made - which means another estate agent is set for the ensuing extra commission. 

This article first appeared in the Daily Telegraph. 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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