Report a breach of the foreign investment rules

Foreign investment rules

The ATO is responsible for administering the foreign investment rules for acquisitions of residential land in Australia. We consider whether proposed acquisitions of Australian residential property by foreign persons are within the national interest. After an application is approved, we then monitor the foreign person’s compliance with the foreign investment rules and take action if a breach occurs.

A foreign person must apply for foreign investment approval before purchasing Australian residential land. This includes established dwellings, new dwellings and vacant land. There are different eligibility requirements and standard approval conditions attached to each property type. For more information, see Foreign investment in Australia.

Investment in other areas such as commercial land, agricultural land, business assets and mining and production tenements are administered by Treasury Foreign Investment. For further guidance on these rules, refer to the Foreign InvestmentExternal Link website.

A foreign person must also register their investment on the Register of Foreign Ownership of Australian Assets (the Register) using Online services for foreign investors.

We manage the Register which captures foreign investment in:

• residential land
• commercial land
• agricultural land
• business assets
• water rights
• mining and production tenements.

After applying for approval from Treasury Foreign Investment, you must then register your investment with the ATO. See Registering Australian assets as a foreign investor.

Who can report a breach

We welcome information from anyone in the community with concerns about suspected illegal activities by foreign persons owning Australian residential property. Your information will help us safeguard Australia's national interest, businesses and economy.

If you are a foreign person, you should also tell us if you think you have broken the foreign investment rules. If you let us know as soon as possible, the penalty may be lower than if we detect your breach.

What you can report

Different rules apply to different situations. We deal with breaches of foreign investment rules relating to residential land and the obligation for all foreign persons to register their assets on the Register.

Examples of what you can report to us include:

• Purchasing and financing properties
• Purchasing established dwellings
• Purchasing vacant land
• Occupying a dwelling
• Third parties
• Officer of a corporation
• Failing to register

Purchasing and financing properties

A foreign person may have broken the rules if they:

• purchase a property without foreign investment approval
• purchase an established dwelling as a foreign non-resident
• fail to register their property on the Register
• provide money to purchase an Australian property but hide the true owner by not registering the property title in the name of the foreign person.

Purchasing established dwellings

An established dwelling is a dwelling on residential land that is not a new dwelling. A foreign person may have broken the rules if they:

• purchase an established dwelling but don't live in it while they are in Australia, or they rent it out
• purchase an established dwelling but don't sell the property within 6 months of their temporary residency visa expiring
• purchase an established dwelling for redevelopment but rent it out instead of redeveloping it to increase the number of dwellings
• purchase more than one established dwelling as a temporary resident
• purchase an established dwelling but don't redevelop it within 4 years
• demolish an established dwelling but don't replace it with 2 or more dwellings
• don't sell an established dwelling previously used for staff accommodation and leave it vacant for 6 months or more.

Purchasing vacant land

A foreign person may have broken the rules if they purchase vacant land but don't develop it by constructing one or more dwellings on the property within 4 years.

Occupying a dwelling

A foreign person may have broken the rules if they provide incorrect information to us about whether a dwelling was vacant or occupied.

Third parties

A third party, such as a stockbroker, lawyer, solicitor, conveyancer, real estate agent or other adviser, may be in breach of the foreign investment law in relation to residential land, if they knowingly assist another person to breach the law by:

• aiding, abetting, counselling or procuring a contravention
• inducing (by threat, promise or otherwise) a contravention
• conspiring with others to affect a contravention
• being, directly or indirectly, knowingly concerned in, or party to, a contravention.

For examples of third-party breaches, see guidance on residential compliance on the Foreign InvestmentExternal Link website.

Officer of a corporation

Where an officer of a corporation authorises or permits a breach of the foreign investment rules, or fails to prevent such a breach from occurring, that officer may be subject to penalties.

Failing to register

A foreign person may have broken the rules if you fail to either:

• register your investment on the Register within the prescribed timeframe
• update the details of the asset if your situation changes.

How to report a breach of the foreign investment rules

If you know or suspect someone is breaking the foreign investment rules or you want to tell us about your breach, you can report by either:

• completing the tip-off form
• phoning us on 1800 060 062

If you prefer to speak to us in a language other than English, phone the Translating and Interpreting Service on 13 14 50 for help with your call.

If you are a tax professional, you can provide information by phoning 13 72 86 (Fast Key Code 3 4).

• writing to us – mark your letter 'in confidence' and post it to

Australian Taxation Office
Tax Integrity Centre
Locked Bag 188
ALBURY NSW 2640.

When we receive information through a tip-off, we will cross check the information provided and decide if further action is needed. It's important to include as much detail as possible so we can investigate fully.

How to complete the tip-off form

Open the ATO tip-off form on our website or in the ATO app and select Start.

If you are voluntarily reporting a breach you have made as foreign investor, include as much detail as possible.

At Who is this about select who you are reporting for:

• Individual, include their   
  • property address
  • name (or the name of their company)
  • phone number
  • social media details (for example, username and profile address)
  • nationality.
   
• Business, include the    
  • business name
  • Australian business number (ABN) (if known)
  • business address
  • phone number
  • website details
  • social media details (for example, webpage and profile addresses).
   
• What is this about – select Other, then Illegal purchase of Australian property by a non-resident.
• Provide as much detail as possible about the reported behaviour, including 
  • activities and behaviour that may be in breach of the foreign investment rules
  • the name of the property being reported and, if known   
    • the purchase date and price
    • the selling agent
    • the status of property (if it is vacant, rented or owner occupied)
    • any other information you have about this property.
     
   
• Include your contact details as we may need to contact you for more information. Your details remain confidential in accordance with privacy laws.

Before submitting the form, check you have provided the relevant information and supporting documentation. Provide as much detail as you can so we can fully assess the information.

Remember to make a note of the reference number when you submit the form. You will need to quote it if you want to add information later.

Your privacy

Your privacy is protected by the Privacy Act 1988 and the strict secrecy provisions of the Income Tax Assessment Act 1936, the Taxation Administration Act 1953 and other tax laws.

Due to privacy laws we are unable to share details specific to any foreign investment compliance investigation. We won't be able to tell you of the outcome of our investigations. We equally respect your privacy in reporting the suspected breach, as well as the privacy of the owner of the reported property.

For more information, see ATO privacy policy.

Past foreign investment breaches

Following are examples of cases we had received as a tip-off:

• Illegal purchase of established dwelling
• Renting out an established dwelling
• Not redeveloping and renting
• Incorrect statement in vacancy fee return

Illegal purchase of established dwelling

We received a community tip-off about a foreign non-resident who didn't apply for foreign investment approval before buying an established residential property. As this was a breach of the rules, the foreign person had to pay a $12,600 infringement penalty.

The foreign person was unable to move into the property or redevelop it to create 2 new dwellings. This was considered contrary to national interest and the foreign person had to sell the property.

Breach of conditions – renting an established dwelling

A tip-off was made about a foreign person who had rented out their established residential property through a real estate agent. This was in breach of the conditions listed on their foreign investment approval.

The foreign person had to pay a $12,600 infringement penalty and move into the property as a condition of their foreign investment approval.

Breach of conditions – not redeveloping and renting

A member of the building and construction industry made a tip-off that 3 properties were held by an individual foreign person and associated trusts in breach of their foreign investment approval conditions. They breached the conditions of their approval by renting out one established property and not redeveloping the others within the approved timeframe. Infringement penalties were imposed and the properties had to be sold.

Incorrect statement in vacancy fee return

A foreign person stated in their vacancy fee return that they had occupied their dwelling for 6 months or more in accordance with the vacancy fee rules. However, our investigation showed the person was overseas for more than 6 months of the year.

We helped the person understand that having a friend occupy the residence did not meet the definition of 'residential occupation' as defined by the foreign investment rules. They had to pay a $89,300 vacancy fee liability.

How to tell us confidentially if you suspect, know or have made a breach of Australia's foreign investment rules.