There has been much publicity regarding the Federal Government’s recent crackdown on unlawful foreign buyers purchasing property in Australia. Much less publicised, has been the changes which allow the Federal Government to impose heavy penalties on persons assisting buyers with purchasing property in Australia, in direct contravention of the Foreign Acquisitions and Takeovers Act 1975 (“FATA”). These persons may include sellers, agents, lawyers, licensed conveyancers, financial advisers, brokers and accountants. If a person such as a lawyer, licensed conveyance, accountant, financial adviser, broker, seller or real estate agent is aware that a buyer is foreign and assists in an unlawful foreign purchase, they can be held liable as if they were the foreign buyer themselves. Fines of up to $135,000.00 or three years’ imprisonment and $675,000.00 for companies can be imposed. Some examples of where someone assisting a foreign buyer could be found to be liable are as follows:
- Where a real estate agent is told by the buyer that they are a foreign person or that the buyer is buying the property on behalf of a foreign person;
- Where an accountant, broker or financial adviser assisting with the purchase of a property is made aware that the buyer is a foreign person; or
- A lawyer acting on behalf of a foreign buyer with a property purchase.
Should you become aware that the buyer is a foreign person you should immediately explain to the buyer that they need to comply with the FATA. If the buyer refuses to do what is necessary to comply with the FATA, you should stop assisting them and subject to any ethical obligations that some parties such as lawyers have to their clients, notify the Federal Government. Whilst it may at times be difficult to ascertain if a buyer is a foreign person it is important to make the necessary enquiries to minimise your risk of a large fine being imposed or imprisonment.