Foreign buyers to get a leg up with new ATO process

Beginning on 26 June, foreign investors and their representatives will use “online services for foreign investors”, a service tailored to assist foreign investors and their domestic representative manage any obligations related to their Australian investments.

According to the Australian Taxation Office’s (ATO) website, the new service will:

– Streamline how foreign investors manage your registration obligations (including new obligations) and other transactions related to Australian investments

– Be accessed with myGovID as your digital identity

– Store information to use in future transactions so you don’t have to provide that information again

– Let you manage your obligations at a time that is convenient

Further to this, a new Register of Foreign Ownership of Australian Assets is expected to kick off from 1 July, according to a media statement from the ATO.

In anticipation of the ATO’s latest service launch, the tax office warns some foreign investment services will be unavailable between 17 June and 25 June, however, payments can still be made throughout this period, with the ATO continuing to process all forms submitted before close of business on 16 June.

At a time when the Australian real estate industry is crying out for investment, Daniel Ho, Juwai IQI co-founder and group managing director, assured the ATO changes won’t directly affect the number of foreign buyer transactions or the amount invested within Australian real estate by this purchasing group.

“This is not a new requirement or restriction, but merely a new way of doing things, and in some ways is better than the old way,” he said.

Over the final three months of 2022, around $20.7 billion flooded the Australian real estate sector from overseas sources, with Chinese investors making up the largest portion after they funnelled $6.7 billion into the sector.

Commercial real estate remained the most popular asset class among foreign investors, attracting $19.3 billion in funding during the December quarter, with the remaining $1.4 billion entering the residential real estate market.

The changes will alter the way foreign investors register their ownership of land, with Mr Ho explaining the new process, which requires a myGovID, in turn will ensure better protection of personal information.

“The new process makes it easier to register investments and will better protect identity and personal information,” he said, before adding that the amended system “will also store information, so buyers only have to enter it once, even if they complete multiple transactions”.

“Australia will not share any foreign investor’s information publicly or with any foreign government. One reason for this change is to better protect their personal information,” he noted.

Last year, a foreign investor was fined $250,000 for a string of unauthorised property purchases in outer Melbourne.