The Foreign Investment Review Board of Australia examines proposals by foreign interests to undertake direct investment in Australia and makes recommendations to the Government under its foreign investment policy. Foreign purchasers must notify the Government prior to acquiring the interest, unless they are exempt from notification.
FIRB policy seeks to channel foreign investment into activity that directly increases the supply of new housing. FIRB has a more restrictive policy on foreign investment in second hand housing. FIRB-update-31-03-09.pdf implemented on 31 March 2009 allow more opportunity for foreign investment in second hand real residential real estate and increase the opportunity for sale of new housing to foreign interests. The FIRB policy for buying residential real estate differs depending upon whether the buyer is exempt from FIRB notification, a foreign person (non-resident foreign investor) or a resident holding a temporary resident's visa.
Exemptions from FIRB notification
For example, categories in which you are exempt include:
- You are 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 a temporary resident and you are purchasing certain residential property such as a single block(s) of vacant land; a new dwelling(s); and/or a second hand dwelling to be used as your principal place of residence (including if it is going to be demolished first then redeveloped)
- you are purchasing new dwelling(s) from the developer, where the developer has pre approval to sell those dwellings to foreign persons
- you are purchasing certain residential real estate in an Integrated Tourism Resort (ITR).
Where buyers are exempt, they need not apply to FIRB for approval to buy residential real estate. Are you exempt? Contactinfo@mslawyers.com.au for more specific advice.
Simplified, a foreign person is a natural person not ordinarily resident in Australia or a corporation or trust in which a foreign person holds a substantial or controlling interest (where 15% or more of the shares or units are beneficially held by a foreign person or 40% if 2 or more foreign persons hold an aggregate interest). Artificial circumvention of the policy guidelines by nominee directors or blind trusts will breach FIRB guidelines.
With FIRB approval, non-resident foreign persons are able to buy single blocks of vacant land provided a dwelling is built within 24 months and new dwellings provided developers market both locally and overseas. Foreign companies trading in Australia may also buy second hand real estate for their Australian based staff in some circumstances. Contracts should be conditional upon FIRB approval.
Who is a Temporary Resident?
The definition of 'temporary resident' includes all foreign persons living in Australia who hold a valid temporary visa which permits them to stay in Australia for a continuous period of more than 12 months (irrespective of how much time is remaining until that visa expires), or have submitted an application for permanent residency (PR), and hold a bridging visa which permits them to stay in Australia until their PR application has been finalized.
Need a Visa?
For more information about visas and migrating to Australia please visit the aml|australian migration lawyers' websitewww.migrationlawyers.com.au
For example, an eligible temporary resident is able, without prior FIRB approval to buy, one secondhand dwelling as a principal place of residence, any number of new dwellings (including a residential dwelling that has been rented out for less than 12 months) or a single block of vacant residential land. An eligible foreign student may buy a second hand dwelling as principal place of residence and there is no limit on purchase price.
Need more information?
If your situation is not covered in the above information, more detailed information on the FIRB changes
The information above is general indication only to assist intending buyers and does not apply to a specific transaction. For more specific legal advice or examination of specific circumstances, contact msl on +61 7 5597 8888 or email@example.com or visit our website www.mslawyers.com.au
For further information you can also visit www.firb.gov.au