Foreigners seeking to acquire residential property in Australia must be aware of the requirements imposed by the FIRB. The FIRB (Foreign Investment Review Board) is a non-statutory body established to advise the Australian Government and its Treasurer regarding Australia’s Foreign Investment Policy. One role of the FIRB is to assess applications from foreigners who are seeking to acquire property in Australia. All foreigners must receive approval from the FIRB before they can acquire any interests in residential property. This article is the second of a multi-part series that aims to provide some guidance on FIRB approval.
Most foreigners will require FIRB approval to acquire Australian residential property. Foreign investors and temporary residents, such as those staying in Australia on certain work, study or spousal visas will require FIRB approval. Not waiting for approval before acquiring any interests is against the law. Foreigners concerned about missing out on a property they are interested in can still enter into a contract as long as it is conditional upon them receiving FIRB approval.
This article sheds some light on acquiring property as a foreign non-resident.
Foreign non-residents are those who do not ordinarily stay in Australia and include holders of temporary visas. They generally can only purchase new dwellings – established dwellings cannot be purchased except for redevelopment.
New dwellings generally refer to dwellings that have not been previously occupied in. A more comprehensive definition may be found in our first article in this series. Refurbished or renovated residential properties will not be considered a new dwelling. Likewise, a demolished dwelling cannot be replaced by a single dwelling for that dwelling to be considered new. Foreign non-residents can acquire new dwellings in Australia so long as they have FIRB approval to purchase that dwelling.
Foreign non-residents cannot purchase established dwellings for use as homes, renting out or holiday homes. The exception to this is if the established dwelling was purchased for redevelopment. In such cases, the existing established dwelling cannot be rented out prior to demolition and construction must be completed within 4 years of the date of FIRB approval. The dwelling also cannot be redeveloped into a single dwelling – more than one must be built.
Another exception to this is if the foreign non-resident operates a substantial Australian business. in that case, if there is a need to house Australian-based employees, the foreign non-resident may purchase established dwellings for them. This is subject to several other conditions, such as ensuring dwellings that are expected to be vacant for more than 6 months are sold. Foreign non-residents may also apply for an exemption certificate that will allow them to purchase multiple new dwellings without having to seek approval for each one.
If you are a foreign non-resident seeking to acquire residential property in Australia and you would like to discuss anything in this article further, email Straits Lawyers at email@example.com or call at 08 8410 9069.
Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.