The Australian Government’s foreign investment policy has been developed to encourage investment in Australia and ensure that such investment is consistent with the needs of the Australian community. The Government recognises the important contribution offshore investment makes to the development of Australia’s industry, resources and community.
Foreign purchasers intending to acquire real estate in Australia must seek prior approval from the Government through the Foreign Investment Review Board unless specifically exempted by the Foreign Acquisitions and Takeovers Regulations.
Definition of Foreign Investment
A foreign interest is briefly described as:
- A person not ordinarily a resident in Australia
- A corporation, business or trust in which a foreigner and any associates have 15% or more ownership or in which several foreigners have 40% or more aggregate of the ownership.
There are various forms of investment proposals with regard to foreign investment in Australian real estate. These include:
- Acquisition of developed commercial real estate valued at AUD$5 million or more.
- Acquisition of urban real estate – irrespective of size
- Acquisition of urban real estate – irrespective of size – unless exempt under regulations
Proposed acquisition of real estate development (within 12 months) is normally approved unless it is contrary to national interest.
Proposed acquisition of residential real estate is exempt from examination in the case of Australian citizens living abroad who are holders of permanent visas or entitled to hold a ‘special category’ visa.
Foreign interests are usually given approval to buy vacant residential land on condition that construction of a dwelling is to commence within 12 months. Approval with also usually be granted to buy home units and townhouses off the plan, under construction or newly constructed (but never occupied), on condition that no more than half of the units in any one development are sold to foreign interests.
Other situations where approval is normally granted include:
Foreign companies buying residences in Australia for their senior executives.
Foreign nationals temporarily resident in Australia for more than 12 months buying for their own use as a principal place of residence subject to the sale of the property when they cease to reside in Australia.
Foreign nationals purchasing residential real estate as joint tenant with an Australian spouse
Proposed acquisitions of commercial development are usually approved unless it is contrary to the national interest. This is determined by the Government on a case by case basis.
For more detailed information on foreign investment in Australia see www.firb.gov.au