Purchasing Australian property – Don’t forget FIRB!

There may be restrictions imposed on foreigners purchasing properties in Australia however this does not mean they are stopped from buying any properties at all.

 

There are still many options available to the investors as long as they meet the criteria.  

 

Please read below for options available to foreign investors  in Australia.

 

Residential Real Estate in Australia – Foreign Investment

 

Temporary Residents of Australia

 

Applies to a person who holds a temporary residency visa which permits them to stay in Australia for a continuous period of more than 12 months

 

a)      Established Dwellings (not investment property): – may acquire one established dwelling only and it must be used as their residence (home) in Australia.  Such proposals are often subject to conditions such as, the temporary resident having to sell the property when it ceases to be their residence.  

b)      New Dwellings: – Temporary residents can also purchase a dwelling which is being purchased directly from the developer and has not been previously occupied for more than 12 months in total. (For example off-the plan purchase / purchase of proposed properties based on plan of construction)

c)      Vacant Land: – Temporary residents can also apply to buy vacant land for residential development.  These applications are normally approved subject to conditions such as that ongoing construction beginning within a certain period of time. (generally within two years).

 

Non-Residents (Foreign person with no resident visa in Australia)  

 

a)      Established Dwellings: – not allowed to be acquired except where foreign companies with a substantial Australian business, acquire second-hand dwellings for the purpose of providing housing for their Australian-based staff.  The company undertakes to sell the property if it is expected to remain vacant for six months or more.  Foreign companies would not be eligible under this category where the property would represent a significant proportion of its Australian assets.

b)      New Dwellings:  allowed under the same condition as temporary residents.

c)      Vacant Land:  allowed under the same condition as temporary residents.

 

New dwelling exemption certificates

Property developers can apply for a new dwelling exemption certificate to sell new dwellings in a development of 50 or more residences to foreign investors.  The value of all apartments that can be bought by a single foreign investor is restricted to $3 million in the one development.  If foreign investors want to purchase apartments above this value, they will have to seek individual approval.

 

FIRB Application Fees

Property valued $1 million or less                                           $5,000

Property valued over $1 million                                              $10,000 then $10,000                                                                                                                         incremental fee increase per                                                                                                    additional $1 million in property                                                                                            value.

New dwelling exemption certificates (Developer)                 $25,000 upfront, with a                                                                                                          reconciliation of properties sold                                                                                              to foreign persons based on                                                                                                    above rates.

 

The contract for sale would generally be subject to FIRB approval. The purchaser would enter into the contract for sale first, and then make the application to the FIRB for their approval.  In the case the approval is not granted, the purchaser would be able to terminate the contract and receive their deposit back.

 

Min Hur

Associate