The chairman of the Foreign Investment Review Board has said the body's ability to discover and prosecute illegal property purchases by foreigners is "sorely limited." Speaking at the Australian Securities and Investment Commission's annual conference, Brian Wilson said a national register was needed to track foreign purchases of existing dwellings, and the Australian Tax Office was better equipped to deal with this data.

"There are about 11 million residential dwellings in Australia, and about 600,000 property transfers every year. It is inevitable some of those properties will be exchanged contrary to the law, but our ability to first discover and then prosecute these cases is sorely limited," said Wilson, who has been chairman of the board since April 2012. "At the moment the FIRB and Treasury can only investigate the cases that come before us. What is needed is central depository of automated data to aid detection. The ATO is better set up for coordinating a big data approach than Treasury, which is a policy body."

FIRB also wants a range of civil penalties introduced. Currently, those found to have illegally purchased property can be forced to divest their purchases and face criminal prosecution possibly resulting in jail time, but the hurdle of proof for a criminal prosecution is very high, and no-one has ever been jailed in Australia over an illegal foreign property investment.

"What we have proposed is a graduated scheme of civil penalties that would make enforcement easier," said Wilson. "Some in the real estate industry have told us they don't want to see civil penalties introduced, while others have agreed there needs to be a tighter regime. Of course there would still be the threat of possible criminal convictions in extreme cases."

Responding to Wilson's comments, Real Estate Institute of Australia CEO Amanda Lynch said, “We have long advocated for the introduction of a national register. It will not only ensure greater transparency, but also importantly allow for easier monitoring and compliance and provide Australians with confidence in the system.”

What do you think? Should the government introduce a national register and civil penalties for foreign buyers found in breach of the law?