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  • Foreign investment in residential real estate: Our compliance approach

    Maintaining strong compliance with Australia’s foreign investment laws is a priority for the Australian Government, to ensure that foreign investment is not contrary to the national interest (or national security). Compliance is the degree to which foreign investors observe or fail to observe relevant taxation and foreign investment laws.

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    Foreign investment rules

    The Australian Taxation Office (ATO) and the Treasury aim to ensure that, for those seeking to invest in Australia, their obligations under the Foreign Acquisitions and Takeovers Act 1975 (the Act) are clear and easy to understand.

    To assist in meeting your obligations, we have prepared general information that will help you understand the responsibilities that foreign persons have when investing in Australian residential real estate. This includes:

    • If you are considering investment in Australian residential real estate, you may have to notify us, or request approval from the Treasury, before you purchase any real estate.
    • If you have received approval from us, including a No-Objection Notification or an Exemption Certificate, you must follow and comply with the conditions listed on this approval.

    Generally, you are required to register your investment with us and lodge a Vacancy Fee return each year.

    You should also ensure that you keep your contact details up-to-date with us at all times.

    Find out about

    Our compliance strategy

    The government remains committed to strengthening Australia’s foreign investment framework. As part of this commitment, we will continue to assist the Treasury and the Foreign Investment Review Board (FIRB) to ensure that foreign investors operate within foreign investment rules and comply with their obligations.

    Our strategy and goals in compliance

    We are committed to making compliance easy for foreign investors.

    This objective is supported by our goals of promoting voluntary compliance and identifying non-compliance with the foreign investment rules and the Foreign Investment Policy.

    These goals include:

    • using developed data, systems, and sources to detect non-compliance of foreign persons
    • improving our understanding of the drivers and causes of non-compliance to identify opportunities to improve voluntary compliance
    • using tailored, targeted and informed approaches and outcomes, when we engage foreign investors and their representatives
    • providing clear and easy to understand communication to foreign persons that enable them to comply.

    Making compliance easy - our education and information focus

    To achieve our goals of making compliance easy, we use a multi-faceted and multi-channel approach where we:

    • Positively engage and assist foreign investors and their representatives in meeting their foreign investment obligations and to provide them with an opportunity to voluntarily disclose, either before or during an investigation.
    • Detect non-compliance by using systems and processes such as data matching, data analysis and monitoring, information sharing with other agencies and community referrals.
    • Tailor our compliance approaches and outcomes for individual instances of non-compliance, which promote sustainable voluntary compliance.
    • Provide a simple and easy to use service to make and receive payments electronically.
    • Engage with intermediaries, agents, and industry bodies to provide education on changes in the foreign investment policy and the ongoing obligations with investors.
    • Use up-to-date technology, modern and efficient processes, and provide the convenience of 24/7 self-service lodgement forms through our online portals.
    • Use a comprehensive website with detailed information on foreign investment obligations. This includes fact sheets and tailored language for understanding.
    • Have a subscription service in which professional advisers and foreign investors can register to receive newsletters on relevant updates.
    • Have a series of webinars and presentations, published on atoTV, to assist the understanding of foreign investment obligations.
    • Have highly skilled and knowledgeable staff committed to educating and assisting foreign investors to identify and meet their foreign investment obligations.
    • Have a customer service hotline to answer less complex enquiries.

    Our compliance actions

    We recognise that most foreign investors are willing to do the right thing and meet their foreign investment obligations, whilst acknowledging that there is a small proportion that either don’t want to comply or have decided not to comply.

    We adopt a compliance approach that is responsive to various categories of foreign investor behaviour, that seeks to influence that behaviour by encouraging and assisting voluntary compliance.

    We use a Compliance Model which shows a continuum of client attitudes towards compliance. At the base of the continuum, clients have the desired attitude of being 'willing to do the right thing'. At the top, clients display the opposite attitudes of deciding not to comply.

    The compliance model also summarises the different types of support and intervention that we may need to provide to collect the required revenue.

    Compliance Model

    ATO compliance model displayed as a pyramid.

    The model suggests that we can influence client behaviour through our response and interactions.

    Accordingly, we undertake a tailored, and differentiated approach in our compliance actions. These approaches follow three levels of enforcement:

    • Low touch: For clients who want to comply but need to access information, services and tools to meet their particular needs. More services, few corrective approaches.
    • Medium touch: An increasing interaction level for clients who seek our support and advice when they encounter something new or complex, or who need increased assistance to get things right. Mixture of services and some corrective approaches.
    • High touch: For sophisticated clients who don’t want to comply or are reckless in their obligations. Increased attention from the ATO with fewer services and firmer corrective approaches.

    In addition, we share data with a wide range of organisations and government departments, including the Australian Securities and Investment Commission, Home Affairs, AUSTRAC, local councils, and state revenue offices.

    For more information see:

    What to expect

    By using our multi-faceted and multi-channel approach, we undertake a number of compliance investigations:

    • Covert data matching and detection: We regularly undertake data matching and sharing with other agencies and organisations to detect instances of non-compliance. During this process, we will covertly monitor foreign investors and their agents.
    • Reviews: We regularly undertake reviews of foreign investors affairs which occur after routine checks, information received from other sources including data matching and community tip-offs. During this process, we will use our third-party sources such as other government agencies to verify details.
    • Audits: During an audit, we will use our third-party sources such as other government agencies, to find out more details on your affairs. We may need further information and will engage foreign investors in an audit.

    In most instances, our case officers will contact you by phone or email to advise why we are conducting an investigation and to explain the investigation process. They may request you to provide additional information about your investments.

    As a result of our investigations, we may take the following actions:

    • direct a foreign investor to take an action/s that will result in compliance, where they were previously breaching the foreign investment rules
    • infringement notices and civil penalty notices: we may issue a 'fine' or penalty to foreign investors for instances of non-compliance
    • disposal orders: we may request a foreign investor to dispose of their investment/s in Australian residential real estate
    • litigation: we may take further action by applying to the relevant court or tribunal to enforce compliance. For more information see Litigation - our policies.

    Find out about

    Have you received a letter from us?

    You may receive correspondence through email, SMS and post channels regarding your foreign investment in Australian residential real estate.

    Some examples of correspondence that you may receive are below:

    Correspondence and delivery channel

    Correspondence type

    Delivery channel

    An approval or No-Objection notification, with conditions

    You may receive this letter if you have been granted approval to purchase residential real estate, where you must comply with the conditions listed on the letter

    • Post
    • Email

    A request for information letter

    You may receive this letter as you are subject to an investigation. You will need to provide us with the required information listed in the letter

    • Post
    • Email

    A request to take action to resolve an identified breach letter

    You may receive this letter as you are subject to an investigation. You should provide all the information requested as soon as practicable.

    • Post
    • Email

    A finalisation of review (or audit) letter

    You may receive this letter as an investigation has concluded. You do not need to do anything further.

    • Post
    • Email

    A prompter-type reminder to meet the conditions on your approval, such as a reminder to construct a dwelling.

    You may receive the letter or SMS as a result of sophisticated ATO data analytics and profiling. You must follow the directions listed on the correspondence to avoid future compliance action.

    • Post
    • Email
    • SMS

    A reminder to lodge an application or Vacancy Fee return

    You may receive this letter as you have not made a lodgement with us. You need to follow the instructions and lodge as soon as practicable

    • Post
    • Email
    • SMS

    A reminder to pay a fee or infringement letter

    You may receive this letter as you have not paid the fee issued to you. You need to pay as soon as practicable.

    • Post
    • Email
    • SMS

    Expected outcomes

    As an outcome of our compliance actions, we have observed the following:

    • improved behaviours of clients and increased voluntary compliance
    • an increase in understanding and knowledge of foreign investment obligations
    • opportunities for future compliance actions
    • improvements in our processes and systems including data quality and accuracy.

    Report a breach of the foreign investment rules

    To report a suspected breach of foreign investment rules you can:

    • complete the tip-off form
    • phone us on the ATO Tip-off hotline on 1800 060 062.

    We investigate all reports of suspected breaches if enough information is provided.

    If you suspect you’ve breached your foreign investment conditions, contact us as soon as possible.

    For more information see, Report a breach of the foreign investment real estate rules.

    Where to get help

    If you need help you can:

    If you don't speak English well and want to talk to an officer, you can phone the Translating and Interpreting Service on

    • 13 14 50 within Australia
    • +61 3 9268 8332 outside Australia.
    Last modified: 31 Jan 2022QC 67710