META news: Foreign investment approval now with ATO

Mobility & Employment Tax Advisory (META) news discusses the Federal government's decision to announce new ATO responsibility.

2015-05-12

In February 2015, the Federal government announced that the ATO would take responsibility for both approving foreign investment in residential real estate and maintaining a new register of foreign investment in agricultural land.

The ATO has announced that it will now commence compliance activities to ensure foreign investors who have invested in Australian residential property are meeting their obligations under the Foreign Acquisition and Takeover Act 1975 (FATA).

We can expect significantly increased compliance activity in this space into the future.

The data matching program will directly impact your employees who are temporary visa holders and have purchased property in Australia.

Summary
The ATO will immediately commence compliance activities to ensure foreign investors who have invested in Australian residential property are meeting their obligations under the Foreign Acquisition and Takeover Act 1975 (FATA) including:

  • From 1 July 2015, the ATO will be responsible for a register related to foreign ownership of agricultural land.
  • From 1 December 2015, the ATO will be responsible for the collection of fees in relation to all foreign investment applications.
  • From 1 December 2015, the ATO will be responsible for administering all aspects of the FATA in relation to residential real estate (including the screening of applications).
  • From 1 July 2016, the ATO will also be responsible for a register related to foreign ownership of residential real estate.
  • There will be a reduced penalty period for those investors who voluntarily inform the ATO that they have breached the rules about investing in residential property. 
  • During this period (from 2 May until 30 November 2015) investors who voluntarily come forward may:
    • be given twelve months to divest, rather than a shorter period determined by the Treasurer
    • not be referred to the Commonwealth Director of Public Prosecutions for criminal prosecution.

  • People involved in current ATO/FIRB investigations, and people involved in serious crime, would not be eligible for these concessions.


Questions

Please contact us if you have any questions or want to discuss how we can provide an efficient and cost effective solution to your business.

If you would like to discuss this further, please contact Sam Morris.