The Australian government is cracking down on foreign ownership and has given the owner of a $38 million mansion, with views over Sydney Opera House, just three months to sell it. Towards the end of February the Australian government also announced it would charge foreigners purchasing residential properties higher fees, and would impose fines on those who violated its foreign investment rules.
These fines could be as much as 25% of the value of the property. The billionaire owner of the $38 million mansion fell foul of these investment rules as apparently the property was bought through shell companies. The real estate market in Sydney has quite a few similarities to that in Vancouver, Canada. Just recently a $51.8 million mansion was bought by a foreigner, but it appears there are no plans to impose similar rules to those in Australia.
According to the article in MSN money, the Council in Vancouver is more focused on examining housing affordability than on high-end real estate transactions. The Mayor of the city has pointed out the high-end real estate market in Vancouver is a similar to that of London, New York and Sydney but that the city prefers to focus on the number of affordable homes available to low and middle income families. At the moment anyone purchasing land in British Columbia is not required to be a Canadian citizen and there is no need for them to disclose their citizenship status. The province has no plans for changing this legislation.
In comparison the Foreign Investment Review Board was established in 1976 in Australia with the purpose of looking at foreign investments and advising government on relevant policies. All purchases by foreign investors have to be approved by the board and non-residents cannot purchase an existing home. In spite of this, the amount of foreign investment into residential property increased by more than 40% in less than 12 months and no court action has been sought by the Board since 2006. As a result the Australian government is looking into ways of strengthening the legislation and apparently more property purchases will be investigated.
Canada is often regarded as being a safe place for wealthy Chinese migrants to invest and experts feel setting up a system similar to Australia’s could prove tricky and it could require action by the federal government rather than the municipal government. Real estate experts would prefer to see a national register of residential property transactions, disclosing the sale price and residency of the buyers.