Myth Busted! Will Chinese-Owned Property in Australia Be "Confiscated"?
Australia has long been favoured by property investors around the world for its exceptional natural environment, excellent educational resources, stable political and economic conditions, and steady investment climate — with Chinese buyers being particularly prominent among them. As the pandemic has been effectively brought under control in Australia, global buyers are now gradually returning to the Australian property market. Recently, however, a number of social media posts have claimed that "Chinese buyers in Australia may have their homes confiscated." Could it be that the Australian government intends to seize vacant properties and turn them into low-cost rental housing?
Australian specialist property lawyers have now provided a professional analysis of this matter:
Under what circumstances would the Australian government acquire an individual's assets?
Is it true or false that vacant homes owned by Chinese nationals in Australia could be compulsorily acquired as low-cost rental housing?
Private property is the most fundamental of civil rights — it is what makes a citizen a citizen, a society a society, and what allows a system of government to remain stable.
Australia has established relevant provisions in its constitution, property law, criminal law and elsewhere to protect the rights of its citizens. This article cannot cover every aspect comprehensively, but it will illustrate some of the common situations that arise under criminal law and property law.
Under what circumstances would the Australian government acquire an individual's assets
1. Criminal law
In Australia, criminal law can authorise the government to confiscate an individual's assets. For example, under the Proceeds of Crime Act 2002 (Cth) (hereinafter the "Proceeds Act"), regardless of a person's nationality, if criminal conduct occurs either in Australia or overseas, their assets in Australia may become subject to a restraining order.
The purpose of a restraining order is to prevent the proceeds of crime from being removed or disposed of.
Sections 17, 18, 19, 20 and 20A of the Proceeds Act provide that a person who has been convicted or charged, a person suspected of a serious offence, a person whose property is suspected to be the proceeds of an indictable offence, a person suspected of having derived literary proceeds from an indictable offence, and a person whose wealth cannot be explained may all be subject to a restraining order.
· Section 37: After a restraining order has been received, no person may dispose of or otherwise deal with the restrained assets, on pain of 5 years' imprisonment or a fine of A$63,000, or both.
· Section 45: If the suspect is not convicted or charged within 28 days of the restraining order being issued, the restraining order will lapse.
· Section 47: If a restraining order has been in force for at least 6 months, it may well become one of the conditions for the court to make a forfeiture order.
2. Property law / administrative law / constitutional law
Taking Queensland as an example, under the Property Law Act 1974 (Qld), where a borrower is unable to repay a loan, the mortgaged asset may be sold by auction, placed under receivership, or foreclosed upon, among other outcomes.
Of course, in a democratic country such as Australia, when the federal government declares a national state of emergency — for instance in situations of war, national defence, terrorist attack or natural disaster — federal powers will be expanded and may restrict citizens' fundamental rights, such as personal liberty. Section 51(xxxi) of the Australian Constitution grants the government the power to acquire an individual's property (including both personal property and real property) within the scope of its powers.
Australian courts have not given a clear-cut definition of "acquisition", but what we can learn from the case of Wurridjal v Commonwealth (2009) 252 ALR 232 is that, under the Northern Territory's emergency response legislation, the Northern Territory compulsorily imposed a 5-year land lease on Indigenous people, and the High Court held that lease to be an "acquisition".
Are vacant homes owned by Chinese nationals in Australia being compulsorily acquired as low-cost rental housing?
In response to the online claims that vacant homes are "being confiscated", we casually opened one WeChat article with more than 30,000 views. However, we were unable to find any related article published by Reuters around 12 May. This is clearly yet another piece of news fabricated against the backdrop of a particular international climate.
In short: the claim that Chinese buyers' properties in Australia will be confiscated and that vacant homes are being requisitioned as low-cost rental housing is a complete and utter rumour!
Since 2017, the Australian government has had a policy whereby "a home in Australia that is left vacant and unoccupied for more than 183 days a year will be subject to a vacancy tax", aimed at curbing property speculation and avoiding the waste of resources.