Hong Kong was named among the thirty uncooperative tax jurisdictions in the European Commission’s (“EC”) tax haven blacklist released on June 17, 2015. The tax jurisdictions on the aforesaid list had been flagged up by ten or more European Union member states. Six of the thirty countries blacklisted are former British territories. Countries notable by their absences include Jersey, Luxembourg and Switzerland, whose secretive tax system are well-known to the world.
Hong Kong government said that the EC decision to blacklist them as a tax haven as totally unfounded and groundless. Hong Kong government also stressed that they have signed agreements with three EU member states to avoid double taxation so far, two of which have come into force, and thus it is unfair to Hong Kong that the EC did not take these agreements into account when making the list.
The full list consists of thirty non-EU member states as shown in the table below.
The Chinese real estate boom in Australia will only be accelerating. It is predicted that an additional $70 billion demand for real estate from Chinese HNWI investors and immigrants over the next five years to 2020. It is an inevitable trend since China is undergoing its unprecedentedly greatest wealth creation, and Australia is on China’s doorstep.
Although the recent enforcement of Foreign Investment Review Board (FIRB) regulations, reporting requirements and fines have been more stringent, it is believed that it will only have a marginal effect on demand. In 2014-15, Chinese HNWI investors and immigrants spent $9.5 billion on residential real estate, which was up 65 percent from the year before and equivalent to 18 percent of the new national housing supply. (Note: Foreign investors are restricted mostly to buying new property.) Purchases were concentrated in Australia's two largest cities, Melbourne and Sydney. Given the aforesaid property boom, we are going to walk through the legal and tax considerations for Chinese HNWIs investing in Australia property market in this article.
If Chinese want to buy a property in Australia, they must obtain prior approval from the FIRB of Australian Government. The reason why they need to have a prior approval is that, the Australian Government believes foreign investment in the property sector should increase the supply of housing, and should not be speculative in nature. Hence, the policy is designed to channel foreign investment into Australia for increasing the supply of new housing.