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In a 119-page report tabled in parliament yesterday, the House of Representatives Standing Committee on Economics said the sources of financing used by some foreign nationals to purchase residential real estate in Australia are a potential concern, including the possibility that shadow banking may be involved in some cases.
“The extent of this issue is uncertain but it would be prudent to ensure that any transactions involving an overseas purchase of an Australian property can be thoroughly investigated if considered suspicious,” the report recommended.
“This should be an area that is considered when the review into anti-money laundering legislation is finalised in 2015.”
As a result, the committee considered that it would be desirable for the Treasury and the Foreign Investment Review Board to use AUSTRAC data, where applicable, as part of its internal screening processes of foreign purchases of real estate.
The recommendation was one of 12 enforcements and penalties detailed in the report, which was due out in October but delayed after growing concerns that its findings could hurt recent trade negotiations with China.
The parliamentary committee, led by Liberal MP Kelly O’Dwyer, has also recommended that the government introduce civil penalties for breaches in the foreign investment framework as it applies to real estate, which would see agents, lawyers and mortgage brokers fined for assisting foreign buyers to bend the rules.
In addition, a national register of land title transfers has been recommended.
The register would record the citizenship and residency status of all purchasers of Australian property and be accessible by relevant agencies from a single database.