I often have people come to me from near and far and from all different walks of life. They are often looking to live and work in Australia, or just want to get into our property investment market. Whatever their situation, I have found that the requirements for Foreign Investment Review Board Approval (“FIRB Approval”) are not well understood and people often receive mixed messages from what they are told and what they read.
This article breaks down;
- when you are required to apply for FIRB Approval; and
- the conditions that are usually imposed on FIRB Approvals.
Who doesn’t need to apply for FIRB approval?
You don’t need to apply for FIRB approval if any of the following apply:
- You are an Australian Citizen (regardless of whether you ordinarily reside in Australia or not).
- You are a New Zealand citizen.
- You hold an Australian permanent visa. For assistance in obtaining visa, please contact our experienced Migration team – see here.
- You are purchasing property as Joint Tenants with your spouse and your spouse meets one of the above 3 requirements. For more information about what it means to purchase as Joint Tenants, see here.
There are also other exemptions, including if you acquire the property under a Will or if you acquire property from a developer who holds an exemption certificate for a new dwelling.
If you do not fall into one of these categories, then:
- you are required to apply for FIRB approval; and
- any Contract to purchase property must contain a special condition making the Contract subject to FIRB approval.
What can I purchase with my FIRB approval?
The Foreign Investment Review Board will also restrict what kind of property is available for purchase.
Residential Established Dwellings
Non-resident foreign persons are generally unable to purchase established dwellings. The government does not want to create an environment where foreign land speculators can sit on existing Australian housing stock.
People with a permanent or temporary visa are normally allowed to purchase one established dwelling to live in as their home. However, there will be conditions imposed such as:
- they must sell the property within 3 months from it ceasing to be their principal place of resident; and
- they cannot rent out any part of the property.
Residential Vacant Land or New Dwellings
Foreign persons will generally be able to purchase vacant land for development, or a new dwelling to use as investment or as their home. The basis of the government’s policy here is to encourage property development in Australia
If you are purchasing vacant land, you must build a dwelling on it within 4 years and must give the Foreign Investment Review Board evidence of completion. Land will not be considered vacant if it has had a dwelling on it previously.
A dwelling is not generally considered to be a new dwelling if it has been refurbished or renovated, or demolished and replaced.
Foreign persons can generally redevelop land as long as the redevelopment increases the housing stock in Australia. This usually means that you need to construct at least one new additional dwelling.
Such proposals are normally approved subject to the following conditions:
- The existing dwelling(s) must remain vacant prior to demolition and redevelopment;
- The existing dwelling(s) is demolished and construction of the new dwelling is completed within four years of the date of approval; and
- Evidence of completed of the dwellings is submitted within 30 days of being received by the applicant. This could include a final occupancy or builder’s completion certification.
Agricultural, Business and Commercial Real Estate
The conditions around these types of purchases by foreign persons are complex. Please contact our office if you require advice about these types of purchases.
How do I apply for FIRB Approval?
You can apply for FIRB approval through the Foreign Investment Review Board website (http://firb.gov.au/).
We can also assist you and can apply for FIRB approval on your behalf.
We strongly recommend that you obtain independent legal advice about your prospects of success prior to applying for FIRB approval, as there are substantial application fees. For example, the fee for applications on residential property worth up to $1,000,000.00, is $5,000.00. The application fee substantially increases for applications for property worth over $1,000,000.00.
Feel free to contact our office for advice on your prospects of success or if you wish to engage Ferguson Cannon Lawyers to assist you in applying for FIRB Approval. We are also able to assist you if you have obtained FIRB approval and your situation changes, or if you believe you may be in breach of the conditions imposed on your FIRB Approval.