Foreign Nationals buying Australian Property- FIRB rules

RBA Property promotes and supports overseas property investment in Australian property, including single investors and property syndicates looking for the security of property in Australia. Property investment strategy concentrates on the capital cities Sydney, Melbourne, Brisbane, Adelaide and the Gold Coast.

The Australian Government’s approach to foreign investment policy is generally to encourage foreign investment in Australian property, business and industry.

The Australian Federal Government’s Foreign Ownership legislation requires purchasers classified as ‘foreign persons’ who want to buy real estate in Australia to seek approval from the government through the Foreign Investment Review Board (FIRB). The FIRB examines the applications and makes recommendations to the government under its foreign investment policy.

A foreign person is someone not ordinarily resident in Australia. This includes overseas investors, businesses and student visa holders, a corporation (with specific requirements) and the trustee of a trust estate.

Australian citizens living overseas, foreign persons who hold permanent visas or a ‘special category’ visa – New Zealand citizens, for example – are exempt from FIRB approval requirements. Foreign persons who purchase residential property under co-ownership as joint tenants with their Australian citizen spouse are also exempt.

The latest changes, which took effect in March 2009, have relaxed a lot of conditions for foreign national to buy property in Australia thus making it easier for Foreign nationals to invest in Australian Property in 2010, the new changes include:

New dwellings
• The existing requirement allows only 50% of new dwellings to be sold to foreign persons in an ‘off-the-plan’ situation. This was lifted provided developers market locally as well as overseas
• Previously a ‘new dwelling’ was defined as never previously occupied or sold. This now includes dwellings that were not sold by the developer but were rented out for no more than 12 months

Second-hand dwellings
• Student visa holders resident in Australia are no longer subject to a $300,000 limit on the value of an established dwelling purchased as their principal place of residence
• Temporary residents will not be required to notify FIRB of proposed acquisitions of an established dwelling for their own residence, any new dwellings and single blocks of vacant residential land
• Foreign-owned companies can now purchase established dwellings for the use of their Australian-based staff provided that they sell or rent them if they are expected to remain vacant for more than six months.
• However, investors are able to purchase established dwellings for the purposes of a redevelopment that will increase the number of dwellings or make an existing dwelling inhabitable. In this case, buyers must notify the FIRB of their intentions and must commence the redevelopment within 24 months of purchase. They can’t rent out the existing dwelling before redevelopment

Vacant residential land
• Foreign-owned companies, trust estates and non-resident foreign persons who purchase single blocks of vacant residential land must build a dwelling within a period of 24 months (previously, within 12 months)
• The conditions previously relating to acquisitions by temporary residents of single blocks of vacant residential land no longer apply

Accommodation facilities
• Accommodation facilities such as resorts and hotels are to be treated as commercial real estate rather than residential real estate. As a result, notification is now only required when the value of the property exceeds the commercial property thresholds ($50m or $5m for heritage-listed properties)

Buyers must notify the FIRB of their intentions and receive approval for purchases of this kind.

Planning to buy property in Australia?

Speak with RBA Property consultants on +61 425339990 – We have helped many Foreign Nationals to buy properties in Australia. Our clients have come from UK, New Zealand, South Africa, China, Hong Kong, Malaysia, India and Korea.

Foreign National buying Australian property can get Home Loan Finance from Australian Banks and Lending Institutions. Get further details by speaking to Overseas Investors Mortgage Loan Brokers from RBA Money

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