The Government issued forced-divestment orders to non-resident owners of homes in three states, the highest-priced one in Victoria valued at over five million dollars.
The Federal Government has ordered the resale of another seven residential properties purchased by overseas buyers.
The Government issued forced-divestment orders to non-resident owners of homes in three states, the highest-priced one in Victoria valued at over five million dollars.
It comes as one property expert questions whether Australia's foreign-ownership rules can adequately deal with overseas buyers trying to bypass domestic laws.
The Federal Treasurer says the owners of the properties did not comply with Australian laws, either in buying an existing home or when circumstances changed after a legal purchase.
Scott Morrison says the order to sell the dwellings shows the Federal Government is responding.
"The Government is doing what we said we'd do. We've strengthened those laws. We are enforcing those laws. We believe very much in the value of foreign investment in this country, but it must be on our terms, according to our laws and in a way that benefits all Australians."
Mr Morrison says, under a reduced-penalty period announced as part of the Government's reform of residential-investment laws, the owners will not be referred for criminal prosecution.
And they have 12 months, instead of the standard three, to sell the properties.
A statement from the Treasurer shows five of the properties are in Victoria, including the most highly valued one in the Melbourne suburb of Hawthorn at over five million dollars.
The remaining two are in Queensland and New South Wales.
Their non-resident buyers are in China, the Chinese administrative region of Hong Kong and Germany.
Separately, an application from an Iranian investor to acquire a commercial property in Victoria has been denied under the Foreign Acquisitions and Takeovers Act.
Scott Morrison says the Hawthorn property was the first one discovered by a special Australian Tax Office taskforce using what he terms "sophisticated data-matching capabilities".
"There have been other, quite significant divestments of residential real estate as a result of the laws that have been brought in, where people have come forward. But this was a proactive investigation by the ATO, and I want to commend Chris Jordan and the ATO on their fine work, being the cop on the beat when it comes to foreign investment in residential real estate in their particular responsibilities. But, obviously, there are other agencies of the government which are involved in this as well."
Government from December 1, 2015 changes mean the Tax Office takes responsibility for residential foreign investment from the Foreign Investment Review Board, a non-statutory advisory body.
Application fees will apply to all foreign investment.
Criminal, monetary and other penalties for violations of real-estate purchase rules will be increased and broadened.
Melbourne-based property expert Michael Yardney says it is evidence Mr Morrison is showing resolve on the issue.
"The problem is that there's been a major loophole in the law that means that, up until now, overseas investors, who are meant to seek Foreign Investment Review Board approval, didn't actually have a government agency who routinely monitored them, who matched registration with actual purchases. Up until now, interestingly, the Australian Tax Department's even been depending just on the community reporting suspicious activity. So he's now said, 'We're taking it seriously.'"
Until then, the Government is offering reduced penalties for any overseas owners who suspect they are violating the laws and report themselves to the government.
Mr Yardney says few have done so and he doubts if that and other Government measures can prevent overseas investors from getting around Australia laws.
"The whole system hasn't worked. There hasn't been enforcement. Sure, the penalties are going to deter some people, but there are still ways around it. Foreign investors are now getting local family members to buy properties in their own names -- people who are Australian residents -- or they're getting other locals to become directors of the companies owned by foreign nationals. So, there are still ways of skirting* around this."
The latest seven homes subject to forced resale follow six forced-divestment orders in August and raise the total to 19 under the Government moves since 2013.
Mr Yardney says the Government is acting in line with one of its policy focal points.
"It's the Government's policy that foreign investment in residential real estate should actually increase housing stock. In other words, what they're trying to do is channel foreign investment into the housing sectors that are going to increase new developments, broaden the supply of properties, increase local building activity. And what that really means is that non-resident foreign investors, they're only allowed to buy new or off-the-plan apartments. They can't buy existing homes. But they can actually buy commercial properties or residential properties which they're going to develop."
