Foreign investors warned not to flout investment rules
The federal government remains steadfast that new rules governing foreign investment in Australian real estate will curtail illegal investment which is driving up house prices, despite new schemes saying they can help foreign buyers sidestep the rules.
According to the Australian Financial Review, The Australian Investments and Migration Service is one of these new schemes. Set up by lawyer Dominique Grubisa, its website claims to allow foreign investors to purchase “unlimited properties within the Australian market”.
“This is a legal structure that enables you to legally buy any property in Australia so as not to breach the Foreign Investments and Takeovers Act,” the website reads.
The structure involves establishing a buying entity which complies with Australian law. That entity then buys a property using funds from the offshore investor, who becomes a secured creditor on the property title, the AFR explains.
However, Liberal MP Kelly O'Dwyer, who headed a parliamentary inquiry into foreign investment in residential real estate, has told the AFR that companies that claim they can skirt the rules are “simply not telling the truth.”
“I am not aware of the specifics of this particular proposal but, as a general rule, if any scheme suggests it can circumvent Australian law on property purchases by foreign nationals, I would advise people to exercise extreme caution,” O'Dwyer said.
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