Investment by foreign persons in residential and commercial real estate is regulated by the Foreign Investment Policy Division of the Australian Government Treasury.
The approach taken by the Australian Government is to encourage foreign investment that is consistent with community interests and concerns, while balancing this with the economic benefits to Australia that arise from such investment. The Australian Government thus has the policy that steers foreign investment in residential real estate to increase the housing stock in Australia and that monitors larger scale investment in commercial real estate.
Generally, foreign persons must apply to the Foreign Investment Review Board (FIRB) before making any real estate investments in Australia. Please see the below to better understand whether you would need to apply for FIRB approval.
Residential Real Estate
You do not need to apply for FIRB approval if you are:
- An Australian citizen living in Australia or living abroad;
- A foreign national holding permanent resident visa or eligible to hold a ‘special category visa’ (such as a New Zealand Citizen); or
- A foreign national purchasing as a joint tenant with an Australian citizen spouse.
If you do not meet the above criteria you may still purchase new dwellings with FIRB approval if:
- The dwelling has not previously been sold (by the developer), and the dwelling has not been occupied for more than 12 months; or
- The dwelling has been granted advanced Off-The-Plan Approval by the FIRB; or
- The dwelling is acquired for the purpose of redevelopment (that is, to demolish the existing dwelling and build new dwellings); or
- You are a temporary resident acquiring the property as your place of residence (in which case you must usually sell the dwelling when it ceases to be your residence).
The definition of new dwellings includes dwellings that have been extensively refurbished and undergone conversion from non-residential to residential.
The definition of temporary residents includes all foreign persons living in Australia who:
- hold a temporary visa permitting continuous stay in Australia for more than 12 months; or
- have submitted an application for PR and hold a bridging visa permitting stay until such PR application is finalised.
Commercial Real Estate
Your acquisition may be exempt if the property is:
- For non-US and non-New Zealand investors, commercial property valued less than $54 million or heritage property valued at less than $5 million;
- For US and New Zealand investors, commercial property valued less than $1078 million; or
- A property that is to be used immediately for industrial or non residential commercial purposes by the purchaser and the purchase is wholly incidental to the purchaser’s business activities;
- Purchased from the Government (Commonwealth, State, Territory or local)
Note that the Foreign Investment Policy specifies that acquisitions for above $50 million are normally approved unless considered contrary to national interest.
FIRB normally approves applications for acquisitions of vacant land (which are not single blocks) if:
- Continuous, substantial construction will be undertaken within 24 months;
FIRB normally approves applications for acquisitions single blocks of vacant land if:
- Continuous, substantial construction will be undertaken within 24 months.
Please follow the link below to view and access the relevant application forms to be submitted if you require FIRB approval.