The ATO's compliance approach to foreign investment in residential real estate was updated this week.* Related ATO investigations can include:
🔸Covert data matching and detection
The ATO regularly undertakes data matching and sharing with other agencies and organisations to detect instances of non-compliance. During this process, the ATO will covertly monitor foreign investors and their agents.
The ATO regularly undertakes 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, the ATO uses third-party sources such as other government agencies to verify details.
During an audit, the ATO will use third-party sources such as other government agencies, to find out more details on the Taxpayer's affairs. Where further information is required the ATO may engage foreign investors in an audit.
As a result of the investigations, the ATO 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;
🔹 Issue infringement notices and civil penalty notices to foreign investors for instances of non-compliance;
🔹 Request a foreign investor to dispose of their investment/s in Australian residential real estate;
🔹 Take further legal action by applying to the relevant court or tribunal to enforce compliance.
*ATO compliance approach to foreign investment in residential real estate - last updated 31-01-2022: https://www.ato.gov.au/General/Foreign-investment-in-Australia/Foreign-investment-in-residential-real-estate--Our-compliance-approach/