This week’s decision by federal treasurer, Joe Hockey, to force the sale of a $39 million Sydney Harbour waterfront property, should serve as a timely reminder for all conveyancers and real estate agents when dealing with people who are neither residents nor citizens of Australia.
A story in Domain, Treasurer Joe Hockey announces forced sale of Point Piper mansion Villa del Mare, explains why this action took place.
From our perspective, helping transfer title between parties in property transactions across South Australia, we think this case is particularly illustrative and might help some parties avoid the consequences of breaking the law.
It’s not the money, it’s the principle
In essence, this week’s events have been about one of China’s richest men buying an mansion through the name of an Australian company which the government believes is a shelf company for a Hong Kong-based real estate group.
Even though the buyer, Xu Jiayin, flew to Sydney in his personal Airbus A319 to finalise the deal last year, it didn’t go through the Foreign Investment Review Board where it is believed it would have been rejected.
The government says the law is very clear, if you are a foreign purchaser, you cannot buy established properties as investments or as dwellings.
According to the article, this could be the beginning of the toppling of many high profile sales as the domino effect takes placed due to increased scrutiny.
What this means for property transactions in Adelaide and South Australia
From our perspective, real estate agents with potential purchasers who are not Australian citizens or Australian residents need to be very careful to ask them the right questions.
They should then clearly point them in the right direction if the purchaser isn’t sure if they are able to legally purchase a property.
At Eckermann Steinert Conveyancers, our standard policy is to ask ALL Purchasers if they are Australian citizens or Australian residents and if they aren’t we ask if they have obtained approval from the Foreign Investment Review Board (FIRB).
The FIRB website is very helpful and something we refer prospective purchasers and Agents to as needed.