FIRB Approval

The Australian Government welcomes foreign investment as buyers who wish to purchase residential real estate has a direct economic benefit to the country.

The Board examines proposals by foreign interests for investment in Australia and, against the background of the Government's foreign investment policy, to make recommendations to the Government on those proposals; to undertake direct investment in Australia and makes recommendations to the Government on whether those proposals are suitable for approval under the Government's policy.

As a general rule, foreign buyers are only permitted to purchase new residential real estate in Australia, which as a result, increases the materials being purchased for construction, increase employment opportunity and a consequential economic benefit to the country. Under this general principle, foreign buyers are permitted to purchase the following categories of residential real estate in Australia:

1) New dwellings

The existing requirement that only 50 per cent of new dwellings can be sold to foreign persons on an ‘off the plan’ basis has been removed provided developers market locally as well as overseas. Vendors are no longer required to have concurrently developed a similar dwelling in order to be able to sell a new stand-alone dwelling to a foreign person. This will be reviewed after two years.

A ‘new dwelling’ is currently defined as having never been occupied or sold; this now includes dwellings that have not been sold but that have been rented out for no more than 12 months.

(2) Vacant residential land

Acquisitions by foreign-owned companies, trust estates and non-resident foreign persons of single blocks of vacant residential land are required to build a dwelling within a period of 24 months (previously within 12 months and development expenditure of at least 50 per cent of land cost).

The conditions previously applied to acquisitions by temporary residents of single blocks of vacant residential land no longer apply (such acquisitions will be exempt after the Regulations are amended in early 2009).

‘Single blocks’ of vacant land generally refers to a block of land on which only a single dwelling could be constructed. This does not include large tracts of land (eg for the purpose of subdivision) or multiple adjacent single blocks (eg to develop a multi-dwelling apartment complex) – additional development conditions may apply to such acquisitions.

***  The only restriction on the ownership of residential property in Australia is that the property cannot be resold to another Foreign Buyer.

***  There are no restrictions on a Foreign Buyer's occupation of a FIRB approved residential property. The property may be rented, left vacant or occupied by the Foreign Buyer or his guests during their visits to Australia.