“When it comes to global rankings, there aren’t too many fields where we’ve been vying for top honours for near on two decades.
In the pantheon of money laundering and terrorism finance, however, we rank right up there with the best.
We stand alongside the US, Haiti, China and Madagascar as among the very few nations that do not include real estate agents, lawyers and accountants in laws to battle money laundering.
As a result, Australian real estate has become a prime target for global money laundering, particularly out of China.”
I’ve asked the Tax Office on numerous occasions why real estate agents aren’t required to get a tax file number from foreigners when they buy/sell properties and reimburse rental income to offshore bank accounts.
Data matching with the AEC doesn’t cut it as foreigners don’t vote. Furthermore I’m not convinced the Lands office has a clue as to who is a foreigner and who isn’t.
The fact that Australia has one of the world’s worst records in money laundering suggests the ATO and other government agencies aren’t doing enough to stop foreigners from exploiting our property market.
With house and rent prices so unaffordable this racquet needs to stop.
Quote from:
https://www.abc.net.au/news/2024-07-09/real-estate-industry-focus-in-money-laundering-crackdown/104076158
Economics Legislation Committee
25/06/2024
Estimates
TREASURY PORTFOLIO
Australian Charities and Not-for-profits Commission
Senator RENNICK: Hi, guys. How are you going? I have a question for the tax office. In the last questions on notice, I got a reply. I asked whether or not you track foreign owners and their rental income; whether or not you ask rental agents to collect information on whether or not these people are foreigners; and whether or not, when rental agents make payments to their clients offshore, withholding tax is being withheld. You said you didn’t do that, and I’m just curious: how do you track leakage from foreign owned rental properties in terms of missing out on tax?
Mr Heferen: I might ask Deputy Commissioner Thompson, who has leapt to the table, to assist.
Mr Thompson: There are a range of ways that we would track that, as we would track any rental income, through the range of data-matching and normal techniques we use. In the context of the specific feature of it being an offshore owner, we would utilise information around capital gains, which is helpful.
Senator RENNICK: But capital gains is after the event. They could own it for 20 years.
Mr Thompson: Yes, so we would be using our normal data-matching techniques and information that we have around—
Senator RENNICK: So the foreigners—I think I’ve asked this before, but I’ll ask again. Do foreigners have to provide a tax file number when they buy a property here in Australia?
Mr Thompson: There’d be a range of information that we would have available on ownership of properties, including rates and land tax. We get all of that information.
Senator RENNICK: Wouldn’t it just be easier to ask the rental agent to collect the tax file number or something if they’re foreign owned so that we can pin it rather than data match? Is this data matching 100 per cent effective?
Mr Thompson: As I think I’ve put to the committee before, we’re very confident in our—we get the data feeds from the state and territory land title offices. We match that with Home Affairs data. We match that with Australian Electoral Commission data. It’s largely an automated process. There are some records that we—
Senator RENNICK: Fair enough.
