Australia’s legal framework generally requires foreigners to apply for foreign investment review board (FIRB) approval before purchasing residential real-estate in Australia.
However, under the Foreign Acquisitions and Takeovers Amendment Act 2015 (Act), certain people and transactions are exempt from the usual requirement for notification under the Act.
In summary, the following criteria must be met to be exempt from FIRB approval:
• an Australian citizen (regardless of whether they are ordinarily resident in Australia or not) or a New Zealand citizen;
• the holder of an Australian permanent visa; or
• foreign persons purchasing property as joint tenants with their Australian citizen spouse, New Zealand citizen spouse, or Australian permanent resident spouse.
Note, the above-mentioned exemption does not apply to those purchasing property as tenants in common.
Further to the above, foreigners do not require FIRB approval to obtain interest in residential real estate that is:
• a new or near-new dwelling purchased from a developer that holds a new or near-new dwelling exemption certificate that allows the developer to sell dwellings in the specified development to foreign persons;
• an aged care facility, retirement village or certain student accommodation provided the interest is not above the relevant threshold. For more information, see Guidance Note 14;
• a time share scheme where the foreign person’s total entitlement (including any associates) to access the land is no more than four weeks in any year;
• acquired by will or devolution of law;
• acquired directly from the Commonwealth, a State, a Territory, or local governing body, or an entity wholly owned by the Commonwealth, a State, a Territory or a local governing body; and
• an interest in certain residential real estate in designated Integrated Tourism Resorts.
Navigating through Australia’s foreign investment regime can be a complex and nuanced process. There are severe penalties for non-compliance and therefore it is imperative that any foreigner acquiring property in Australia carefully analyse the obligations imposed under the Act.
You are welcome to contact our office on the below listed contact details if you require further information.
By RSG Lawyers.
Footnotes are available upon request.
(03) 9350 4440