About Australian foreign investment rules
Australia has laws governing what a foreign person must do before, during and after they purchase (invest in) Australian assets. These obligations are set out in the Foreign Acquisitions and Takeovers Act 1975 (FATA 1975)Opens in a new window and associated legislation. This is to ensure that foreign investment is in line with Australia's national interest and security.
For foreign investment in non-residential Australian assets, see Foreign Investment in AustraliaExternal Link. Here you can also find information on the Treasurer's powers, compliance, and reporting requirements.
How to keep up with your foreign investment obligations
Ensure that you keep up to date with any changes in Australian foreign investment rules. The easiest way to do this is to subscribe to our newsletters, RSS news feeds or email subscriptions.
If you find it difficult to understand the rules, you can:
- talk to your adviser
- use the Translating and Interpreting Service (TIS) if you do not speak English well, by contacting TIS National by phone
- 13 14 50 in Australia
- +61 3 9268 8332 outside Australia.
- if you would like to speak in a language other than English, phone TIS National between 8:00 am and 5:00 pm (AEST or AEDT), Monday to Friday. Request to be connected to the relevant phone number on this page for your query, in the language you want to speak in
- call us our customer service phone line – 1800 050 377 between 8:00 am and 6:00 pm (AEST or AEDT), Monday to Friday.
For more information, see Contact us about foreign investment.
How we monitor non-compliance with foreign investment
How we monitor and identify non-compliance:
- using data and analytics to drive early intervention and strive towards our goal of prevention rather than correction
- through information sharing with other agencies and an increasing variety of third-party providers
- by reviewing reports made by the community to identify and treat any non-compliance.
Additionally, after an application is approved, we monitor the foreign person's compliance with the foreign investment rules and take compliance action if a breach occurs.
Action we take if a foreign person does not comply
If you think you have breached your foreign investment obligation, contact us as soon as possible to achieve the best outcome.
If you have information about someone you think may be deliberately breaking our foreign investment rules, you can confidentially report a breach to us.
You can disclose a breach of the foreign investment laws, prior to, or during an investigation to get the best outcome for all parties.
For those who do not comply, we adopt a compliance approach that:
- is responsive to various categories of foreign person behaviour
- seeks to influence that behaviour by encouraging and assisting voluntary compliance.
We use a compliance model which shows the range of client attitudes towards compliance, and:
- summarises the different types of support and intervention we may need to provide to collect the required revenue
- suggests how we can influence client behaviour through our response and interactions.
We share data with a wide range of organisations and government departments, including the Australian Securities and Investment Commission (ASIC), Home Affairs, AUSTRAC, local councils, and state revenue offices.
For more information about compliance and reporting requirements, see Our approach to complianceExternal Link in Australia.
Our compliance tools
We undertake several investigations including:
- 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 persons and their agents.
- Reviews – we regularly undertake reviews of foreign persons' affairs that 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 the foreign person in an audit.
What to expect in an investigation process
In most instances, our case officers will contact you by phone or email to advise why we are investigating and explain the investigation process. They may ask you to provide additional information about your investments.
After we complete the investigation, we may:
- direct a foreign person to take an action or actions that will result in compliance, where they were previously breaching the foreign investment rules
- issue infringement notices or penalties to foreign persons for instances of non-compliance
- issue disposal orders, requesting a foreign person to dispose of their investments in Australian residential property
- review and revoke foreign investment approval where a foreign person has provided false or misleading information (or failed to provide important information) when seeking approval (or to obtain approval).
- take further action by applying to the relevant court or tribunal to enforce compliance (see Litigation – our policies).
Examples of compliance actions we have taken
In 2022, we welcomed the decision handed down by the Federal Court of Australia in relation to breaches of the FATA 1975.
Using sophisticated compliance data-matching systems, our investigations into tax evasion and fraud identified several concerning activities by some foreign persons.
In this instance, a foreign person purchased 4 properties without first applying for and receiving foreign investment approval. The foreign person also held 2 established residential properties. These actions are considered serious breaches of the law and warranted a 'high touch' approach in treatment.
The landmark decision handed down in the Federal Court attracted penalties of $250,000. It sent a strong message to foreign persons on the importance of understanding and complying with their foreign investment obligations.
This outcome highlights the effectiveness of our compliance measures and compliance model. Our intention is to use the full force of the law to address any malpractice that exploits or damages the integrity of the tax system.
For more information on the Federal Court outcome, see:
- Australian Taxation Office media release of 11 April, 2022 Residential real estate purchases by foreign person attract $250,000 penalty
- Commissioner of Taxation v Balasubramaniyan [2022] FCA 374 (8 April 2022)External Link (austlii.edu.au).
More guidance on compliance and penalties for residential land is available, see Foreign investment in AustraliaExternal Link.
How we correspond with you
You may receive correspondence by email, SMS or post about your foreign investment in Australian residential property.
The table below lists some examples of correspondence you may receive from us.
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Correspondence type |
Delivery channel |
|---|---|
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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. |
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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. |
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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. |
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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. |
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A prompter-type reminder to meet the conditions on your approval, such as a reminder to construct a dwelling. You may receive the letter as a result of sophisticated ATO data analytics and profiling. You must follow the directions listed on the correspondence to avoid future compliance action. |
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A reminder to lodge an application or vacancy fee return You may receive this letter as you have not made a lodgment with us. You need to follow the instructions and lodge as soon as practicable. |
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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. |
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What we expect from compliance action
As an outcome of our compliance actions, we expect to see:
- improved behaviours and increased voluntary compliance
- increased understanding and knowledge of foreign investment obligations
- opportunities for future compliance actions
- improvements in our processes and systems, including data quality and accuracy.