The Australian Government’s Foreign Investment Review Board (FIRB) requires non-residents of Australia to apply for approval prior to purchasing residential property in Australia. This article summarises who needs to apply, timeframes and exemptions.
Persons who do not ordinarily reside in Australia (foreign non-resident) or a holder of a visa allowing a limited stay in Australia will need to apply. Corporations are treated similarly based on the usual residence of the directors.
FIRB considerations are based on the following property types:
An application is made online through the Australian Taxation Office’s website and is quite simple. An application fee is required to be paid which is calculated based on your purchase price. For example, for a property up to $1 million, a fee of $5,000 is payable. The fees increase significantly at $1 million intervals.
Upon receipt of payment of the application fee by FIRB, the turnaround time for the approval is 30 days. This period will be longer if approval is sent via post as opposed to email.
It is imperative that any contract be conditional upon receipt of FIRB approval. Obviously this can mean that contracts will take longer to settle and there will be a chance that approval may not be provided, resulting in a contract falling through. Developers should consider whether it is in their best interests to obtain a new dwelling exemption certificate to ensure efficient settlement of new residential properties offered for sale.
FIRB approval is not required if you are an Australian or New Zealand citizen or if you fall into any of the following categories:
There are also exemptions for certain companies, trusts and charities.
The above information is an overview only. Before proceeding with any contract you should seek legal advice specific to your circumstances to ensure you do not fall foul of the legislation.
For further information, please do not hesitate to contact: