If you are looking to by residential property in Australia, you may require approval to do so from the Foreign Investment Review Board (FIRB).
This section 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 FIRB examines proposals by foreign interests to undertake direct investment in Australia and makes recommendations to the Government under its foreign investment policy. It’s policy is founded in the Foreign Acquisitions and Takeovers Act 1975 (FATA).
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.
While we recommend foreign investors should seek legal advice if in doubt, the policy state that you do not need to submit an application for approval to acquire real estate in Australia if:
- You do not need to submit an application for approval to acquire real estate in Australia if:
- You are an Australian citizen living abroad;
- Your spouse is an Australian citizen (not a permanent resident) and you are purchasing residential real estate in both names as joint tenants (not tenants in common);
- You are a New Zealand citizen and you are purchasing residential property;
- You hold a permanent resident visa and you are purchasing residential property;
- You are purchasing new dwelling(s) from the developer, where the developer has pre-approval to sell those dwellings to foreign persons;
- You are acquiring an interest in a time share scheme which does not permit you (and any of your associates) more than 4 weeks entitlement per year;
- You are purchasing certain residential real estate in an Integrated Tourism Resort (ITR);
- You are acquiring an interest in developed commercial property valued below the relevant monetary thresholds;
- You are acquiring an interest in developed commercial property where the property is to be used immediately and in its present state for industrial or non residential commercial purposes. The acquisition must be wholly incidental to the purchaser’s proposed or existing business activities;
- You are acquiring an interest by will or by operation of law (such as, a court order regarding the division of property in a divorce settlement, but not if both parties simply agree to transfer property without a court’s intervention); or
- You are purchasing property from the Government (Commonwealth, State or Territory, or local).
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 are eligible for approval under the policy, then the acquisition will be approved subject to legally binding conditions according to the category of property (if applicable). Your application must include the relevant Declaration confirming that you meet the eligibility criteria and that you will abide by the relevant conditions.
If you are not eligible for approval under the policy, then the acquisition is generally considered to be contrary to the national interest and will not normally be approved.
Proposed acquisitions of vacant land for residential development are normally approved subject to development condition(s) imposed under the FATA.
Acquisitions of single blocks of vacant land (that is, land which is zoned to permit the construction of no more than one residential dwelling per block of land) for the purpose of building a single residential dwelling on each block are normally approved subject to the following condition:
- continuous substantial construction must commence within 24 months.
Acquisitions of other vacant land (not single blocks) for the purpose of building multiple residential dwellings are normally approved subject to the following conditions:
- continuous substantial construction must commence within 24 months; and
- at least 50 per cent of the acquisition cost or the current market value of the land (whichever is higher) must be spent on development.
Once these conditions have been fulfilled, properties acquired under this category may be rented out, sold to Australian interests or other eligible purchasers, or retained for the foreign investor’s own use.
New dwellings acquired ‘off the plan’ (before construction commences or during the construction phase) or after construction is complete are normally approved where the dwellings:
- have not previously been sold (that is, they are purchased from the developer); and
- have not been occupied for more than 12 months.
There are no restrictions on the number of such dwellings in a new development which may be sold to foreign persons, provided that the developer markets the dwellings locally as well as overseas (that is, the dwellings cannot be marketed exclusively overseas).
This category includes dwellings that are part of extensively refurbished buildings where the building’s use has undergone a change from non-residential (for example, office or warehouse) to residential. It does not include established residential real estate that has been refurbished or renovated.
A property purchased under this category may be rented out, sold to Australian interests or other eligible purchasers, or retained for the foreign investor’s own use. Once the property has been purchased, it is second-hand real estate and is subject to the restrictions applying to that category.