Real Estate and Overseas Investment

coolhead on 15/01/2016 - 15:13
Last edited 15/01/2016 - 15:16 by 1 other user

I have been reading some articles around the property market and how the property is overpriced due to overseas investment.
Some articles and news also talk about Chinese black money coming into the property market and that being the main reason for bumped up property prices specially in Sydney and Melb.

The thing that i don't understand is how large amount of black money can be used to buy properties in Australia considering that:

• people are not allowed to bring large amounts of cash from overseas
• transactions in Australia are not done in cash (salaries, business transactions etc), so effectively you may not be able to earn huge amounts of black money
• if they are done through bank accounts then that's effectively not black money
• Even if you have a buyer ready with some cash (e.g. $100k for a $500k property), the seller might say no to it

Would be interested in hearing what people think and if someone can shed some light on this.

Thanks,

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  altomic on 15/01/2016 - 15:42

  it's black money whether it is physical or in an account. it's ill gotten gains -drug money, prostitution, etc, etc

  chinese black physical money goes to neighbouring country and placed in bank account which is transferred to Aus bank account which is used to buy house.

  the problem is that it is untraceable (back to it's illegal origins).

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    coolhead on 15/01/2016 - 16:30

    so u saying it may enter australia thorugh bank accounts which makes it kind of legal..
    but the soucre account may have it as black money… but wouldnt the banks questions how come u r depositing so much cash in this account..

    • 

      altomic on 15/01/2016 - 19:20

      "oh wow, money deposited in to an account which we earn money with from short term interest" - bank probably

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  2jzzzz on 15/01/2016 - 16:31

  +1

  You can bring as much money into Australia as you like. Just declare it and fill a form out. No costs or taxes.

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    coolhead on 15/01/2016 - 16:31

    even more than $10k?

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      2jzzzz on 15/01/2016 - 17:09

      +1

      As much as you can carry.

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        coolhead on 17/01/2016 - 13:04

        ahh ok.. so you might have to declare it at airport and explain the source of money to customs…but i see your point this could be done.. Ta

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  geek001 on 15/01/2016 - 17:05

  I read an article about this. There are brokers in China who can do a "transfer" for your black money. What you do is transfer your money into their account, and once they have received your money, they call someone in the country where you want to transfer the money to, eg. Australia, and ask them to transfer the equivalent AUD into your Australian bank account, minus their fee of course. So in actual fact, no money actually crossed borders and is circumventing money laundering checks banks put in place and therefore untraceable.

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    coolhead on 17/01/2016 - 13:03

    Thanks geek001 - yeah this is something that might be happening on large scale.. money laundering is everywhere and maybe more prominent in real estate…

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  Ughhh on 15/01/2016 - 18:48

  transactions in Australia are not done in cash (salaries, business transactions etc), so effectively you may not be able to earn huge amounts of black money

  Don't get your point here. The black money doesn't come from Australia, its from China. In China, as long as you got the right contacts, loads of money, smart and no morals/ethics and keep it fairly low key, there's unlimited money to be made!

  if they are done through bank accounts then that's effectively not black money

  Highly doubt the Australian banks will ask you where your money came from.

  Even if you have a buyer ready with some cash (e.g. $100k for a $500k property), the seller might say no to it

  If the moneys there and they're paying more than the locals would, why would the sellers say no?

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    coolhead on 17/01/2016 - 13:01

    here my point is if the seller says Yes then how would he manage the $100k cash.. Can he take the money from buyer and deposit $100k in his bank account.. ?
    my understanding is handling large amounts of cash might be a problem (taxwise) in Australia

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      Ughhh on 17/01/2016 - 13:25

      I would assume the money (inc deposits) gets handled like any other property purchase- like into a trust account or something. Chances are, the people with the money come from business backgrounds, so big money isn't surprsing, compared to say a burger flipper. Plus $100k isn't really that much, for some average properties, its not even enough for a deposit!

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  abh_gup on 16/01/2016 - 00:17

  Reading up on CTF AML and the Three-Stage Process of conversion of black money to white may help you understand the loop holes.
  In regard to a comment above, ATO is notified on any bank's single or daily transaction over $9,999, or where there is a reason to question the source OR recipient.