Beware tighter rules and pitfalls of buying real estate in Australia

AUSTRALIA'S recent crackdown on foreign investments in real estate should send a cautionary message to Singaporeans.

Last week, the Australian Treasurer, Joe Hockey, announced the forced sale of six properties after it was revealed that the owners had either bought the properties without approval from Australia's Foreign Investment Review Board (FIRB) or without having met other legal requirements for owning property in the country.

In all, a tax office team of 50 investigators is investigating 462 possible breaches of foreign home ownership rules after a data matching exercise across several government agencies. Briefly, Australia's rules allow foreigners to buy only new homes, not pre-owned ones. And when they sell, they have to sell to locals. They are also liable for capital gains tax if they sell at a profit.