Trustee arrangements will fail FIRB test if caught: Kelly O'Dwyer

Foreign buyers using trust structures to hide purchases are breaking the law, according to the Parliamentary Secretary for the Treasurer Kelly O'Dwyer.

"If you're a foreign investor, you can't purchase existing property and if you're trying to set up a structure to help make the purchase, you're circumventing the framework and that's against the law," she told The Australian Financial Review.

O'Dwyer's comments came in response to estate agent Robert Simeon, a regular Property Observer columnist, whose column detailed the ways in which he thought foreign buyers were stepping around foreign investment rules to purchase local property.

O'Dwyer chaired a House of Representatives inquiry into foreign purchases of residential property which has prompted the government's Options Paper on foreign investment in housing, which will take feedback until 20 March.

"The law is very clear around established versus new property," O'Dwyer said.