A CHINESE tycoon has been ordered to sell his $5 million Melbourne mansion after he was caught breaching Australia’s foreign ownership laws.
The property is the first in Victoria to be slapped with a divestment order and is one of five in Melbourne that will be forcibly sold after investigations by the Australian Taxation Office.
The house at 6 Higham Rd, Hawthorn East, was purchased by a Bentley-driving Chinese businessman at auction on May 31 last year.
He used $300,000 bids to knock out rivals at the auction. Records list the owner as Li Jian Guo.
Treasurer Scott Morrison said the house was bought without approval from the Government.
That is required before an overseas owner can buy an existing property.
The five-bedroom mansion on a leafy street with a pool, manicured gardens, “hotel-style’’ bathrooms and formal dining and sitting areas is now back on the market.
The Hawthorn East is the first home in Victoria hit with a divestment order.
Federal Treasurer Scott Morrison.
Mr Morrison has ordered four other properties to be sold off, after overseas owners were found to be holding them illegally.
They are an $802,000 house at Springvale and three Carlton properties worth $225,000, $235,000 and $585,000.
Like the Hawthorn East home, the Springvale home and the most expensive Carlton property are owned by mainland China buyers. The two smaller properties are owned by Hong Kong buyers.
“These forced sales demonstrate that the Coalition Government’s strengthened foreign investment framework is ensuring that foreign nationals who are illegally holding Australian property will not be allowed to get away with it,’’ Mr Morrison said.
An Iranian buyer was denied permission to snap up a $4.4 million investment property in Canterbury, because it was deemed not to be in the national interest.
The ATO is spearheading a crackdown on foreign homebuyers.
Several properties, including a $39 million harbourside mansion in Sydney, have been sold off under an amnesty after their owners came forward to the Government.
But the Hawthorn East home is the first to be subjected to a sale order by the ATO.
The Government took compliance of foreign homeowners off the Foreign Investment Review Board and handed it to the ATO in May, and 532 cases are being probed.
Buyer advocate David Morell welcomed the Government’s action.
“The foreign owners are just pricing everyone out of the market, they have inflated the market,’’ he said.