Foreign Investment

/Foreign Investment
Foreign Investment 2017-09-27T09:22:06+00:00

Foreign Investment

If you’re looking to by residential property in Australia, you may require approval from the Foreign Investment Review Board (FIRB).

This page is based on information from the FIRB website. We will guide you through the FIRB process for any property sourced through us.

Who is the FIRB

The Foreign Investment Review Board (FIRB) is a non-statutory body that advises the Government on foreign investment policy and its administration. The Board examines proposals by foreign interests to undertake direct investment in Australia and makes recommendations to the Government on whether those proposals are suitable for approval under the Government’s policy.

The  policy makes it relatively easy for foreign interests to invest in new residential real estate developments such as house and land, home units and townhouses.

Exemptions

Persons that meet certain criteria do not need foreign investment approval before purchasing residential real estate in Australia. This includes:

  • an Australian citizen (regardless of whether they are ordinarily resident in Australia or not);
  • a New Zealand citizen;
  • the holder of an Australian permanent visa; or
  • foreign persons purchasing property as joint tenants with their Australian citizen spouse, New Zealand citizen spouse, or Australian permanent resident spouse.
    • This exemption does not include purchasing property as tenants in common.

Foreign persons, regardless of citizenship or residency, do not require foreign investment approval to acquire an interest in residential real estate that is:

  • a new or near-new dwelling purchased from a developer that holds a new or near-new dwelling exemption certificate that allows the developer to sell dwellings in the specified development to foreign persons.
  • an aged care facility, retirement village or certain student accommodation provided the interest is not above the relevant threshold. For more information, see Guidance Note 14.
  • a time share scheme where the foreign person’s total entitlement (including any associates) to access the land is no more than four weeks in any year;
  • acquired by will or devolution of law;
  • acquired directly from the Commonwealth, a State, a Territory, or local governing body, or an entity wholly owned by the Commonwealth, a State, a Territory or a local governing body; and
  • an interest in certain residential real estate in designated Integrated Tourism Resorts.

Further exemptions may apply. For more information, click here.

Making a Purchase

If an acquisition is not exempt, foreign purchaser(s) must notify the Government prior to acquiring the interest. If they enter a contract, it should be conditional upon foreign investment approval, and they should ensure that it remains conditional until after foreign investment approval is granted.

Foreign persons are in breach of the FATA if they enter an unconditional contract to acquire property (or if their conditional contract becomes unconditional) before approval is granted and may be subject to significant penalties.

If you would like to apply for foreign investment approval for:

  • A new dwelling
  • Vacant residential land
  • A second hand or established dwelling
  • An exemption certificate for established dwellings
  • An exemption certificate for residential land (other than established dwellings)

Please use the Australian Taxation Office’s foreign investment application form.

Foreign persons should take care to ensure they supply the correct details and all required information as part of their application, as changes to details such as name or property address after an approval has been granted may require foreign persons to seek a new approval and be subject to further fees.

Eligibility Criteria

All foreign persons are eligible for a residential land (other than established dwellings) exemption certificate. However no agreements (even conditional agreements) can be entered into before the exemption certificate is given.

Residential land (other than established dwellings) exemption certificates provide a foreign person with approval to purchase one unspecified vacant land title or new (or near-new) dwelling in the state or territory specified and up to the value specified on the exemption certificate.

Conditions

Certificates will normally be approved subject to the same standard conditions (if any) applicable to a foreign person who purchases a new (or near-new) dwelling or vacant residential land title by applying for approval for a specific property. The certificates will also reflect the treatment of residential property in certain circumstances to maintain the national interest (for example treating vacant land that had previously had a dwelling on it as if it were an established dwelling).

The Certificates will also include a condition requiring that the foreign person to register the property on the Australian Taxation Office’s Land Register (registration is available at: www.ato.gov.au) once they have purchased a dwelling under the certificate.

Foreign persons who do not comply with the conditions on the certificate (for example, by purchasing a property above the specified value or purchasing more than one new (or near new) dwelling or vacant land title) will have breached the foreign investment rules and may be subject to strict penalties.

Foreign persons may apply to vary the conditions of the exemption certificate. A fee will apply for this.

Fees

An application for a residential land (other than established dwellings) exemption certificate will not be considered until the relevant application fee has been paid. The application fee is based on the same tiered fee structure as applies if seeking individual approval to purchase a specific new (or near new) dwelling or vacant land title.

Fees will generally not be waived or remitted if a foreign person purchases a property for a price that is less than the amount specified in the exemption certificate, or if they are unsuccessful in purchasing a property before the exemption certificate expires. For more information on fees, see Guidance Note 29.

Penalties

Strict penalties (including civil and criminal penalties and disposal orders) may apply for breaches of Australia’s foreign investment rules. For more information, see Guidance Note 11.

Cases of non‑compliance with Australia’s foreign investment framework may also be brought to the attention of law enforcement agencies and other Commonwealth departments such as the Department of Immigration and Border Protection.

New Dwellings and Vacant Land

Foreign persons generally need to apply and receive foreign investment approval before purchasing new dwellings and vacant residential land for development. Applications to purchase new dwellings are usually approved without conditions. Applications to purchase vacant land are normally approved subject to construction being completed within four years (to prevent land banking). Once new dwellings are built or purchased, they may be rented out, sold, or retained for the foreign investor’s own use.

Land that has previously had an established dwelling on it would generally not be treated as vacant land for the purposes of Australia’s foreign investment framework.

A single dwelling that has been built to replace one or more demolished established dwellings would generally not be considered a new dwelling for the purposes of Australia’s foreign investment framework.

For more information, call us today on 1800 248 911 or fill out the form below and we’ll be in touch.

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