The government is considering a ban on sales of residential property that breach foreign investment rules, Scott Morrison has revealed.
The treasurer flagged the plan on 2GB Radio on Tuesday when asked why the current regime only allowed for forced sales where rules were breached rather than a check on purchasers’ entitlement to buy property before a sale.
On Monday Morrison ordered the sale of 16 Australian residential properties because the owners were found to be in breach of the foreign investment rules. Under the rules, people without Australian citizenship generally need to apply for approval before purchasing residential real estate in Australia.
Asked why there was no requirement for conveyancers to warn buyers a sale was not legal before it went ahead, Morrison said “these are really good points” and it was “a very good suggestion”.
“The purchases take place under state conveyancing laws not federal, so it means state and federal [governments] working together and there’s nothing wrong with us doing that,” he said.
Morrison said the suggestion had been made to him and the government was “taking a close look at how we could achieve that”.
The comments suggest the government is designing a regime to check residency and citizenship status of buyers before residential property sales.
The treasurer said it would be “completely unethical” for a real estate agent to sell a house in breach of foreign investment rules. “They’re aware of the laws like everyone else. It’s a shame we have to go to the extent that you’re suggesting.”
Morrison said there were “other issues around proof of residency that have been raised with me in recent times, and I’m having a close look at that as well”.
He said there had been $92m of forced sales so far, which “transferred the compliance, the police work to the [Australian Taxation Office]”.
“We have foreign investment rules in this country, and we’re enforcing them.”
