Debunked! Will Chinese-owned property in Australia be "confiscated by the government"?

Australia has long been favoured by property investors worldwide, thanks to its exceptional natural environment, outstanding education resources, stable political and economic climate, and steady investment conditions — with Chinese buyers being particularly prominent. As the pandemic has been effectively brought under control in Australia, global buyers are now gradually returning to the Australian property market. Recently, however, numerous posts on social media have claimed that "Chinese buyers' homes in Australia may be confiscated and seized." Could the Australian government really be about to seize vacant properties for use as low-rent housing?

Professional Australian property lawyers have provided an expert analysis of this issue:

• Under what circumstances would the Australian government acquire an individual's assets?

• Could Chinese-owned vacant properties in Australia be compulsorily acquired as low-rent housing — fact or fiction?

Private property is the most fundamental of civil rights — a basic feature that makes citizens citizens, society society, and a political system 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 exhaustively, but it will illustrate some of the common situations arising 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 they commit a criminal offence in Australia or overseas, their Australian assets may be subject to a restraining order.

The purpose of a restraining order is to prevent the proceeds of crime from being moved or disposed of. 

 Sections 17, 18, 19, 20 and 20A of the Proceeds Act state that restraining orders may be issued to persons who have been convicted or charged, persons suspected of committing a serious offence, persons whose property is suspected to be the proceeds of an indictable offence, persons suspected of having derived literary proceeds from an indictable offence, and persons with unexplained wealth.

· Section 37: After receiving a restraining order, no person may dispose of or otherwise deal with the restrained assets, on penalty of 5 years' imprisonment or a fine of A$63,000, or both.

· Section 45: If, within 28 days of a restraining order being made, the suspect has not been convicted or charged, the restraining order ceases to have effect.

·Section 47: If a restraining order has been in effect for at least 6 months, it may well become one of the conditions for the court to issue 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 assets may be sold by auction, placed under receivership, subject to foreclosure, and so on.

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 attacks or natural disasters — federal powers are expanded and may restrict citizens' basic rights, such as personal liberty. Section 51(xxxi) of the Australian Constitution grants the government the power, within its authority, to make an acquisition of personal property (including both movable and immovable property).

The Australian courts have not provided a precise, clear-cut definition of "acquisition"; however, from the case of Wurridjal v Commonwealth (2009) 252 ALR 232 we know that, under the Northern Territory's emergency response legislation, the Northern Territory imposed a compulsory 5-year land lease on Indigenous people, and the High Court held that this lease constituted an "acquisition".

Are Chinese-owned vacant properties in Australia being compulsorily acquired as low-rent housing?

In response to the online claims that vacant properties are "being confiscated and seized", we picked at random a public-account article that had received over 30,000 views. As the screenshot below shows, the news of this confiscation and seizure supposedly came from a Reuters report on 12 May.

However, we could not find any related article published by Reuters around 12 May. This is clearly another fabricated news story concocted amid a particular international situation.

In fact, as the search records in the image below show, this piece of news has actually been "circulating" since as early as 2018. The same recipe, the same flavour — it can simply be recycled every time international frictions arise.

In short: the claim that Chinese buyers' properties in Australia will be confiscated and that vacant properties will be acquired as low-rent housing is utterly and completely a rumour!!
Since 2017 the Australian government has introduced a policy whereby "if a home in Australia is left vacant and unoccupied for more than 183 days in a year, a vacancy tax will be levied",  in order to curb property speculation and avoid the waste of resources.