Foreign Property Buyers- Changes in FIRB rules

Foreign Investment Rules For Australian Residential Housing

This will effect non-resident property investors (overseas buyers) and temporary residents of Australia

Changes to foreign investment in real estate rules

All temporary residents seeking to purchase an existing property in Australia will now be brought within the FIRB notification, screening and approval process.

Temporary residents will be required to notify, be screened or be approved by FIRB. Today’s changes ensure that temporary residents are subject to the same compulsory notification, screening and approval requirements required of foreign non-residents.

In addition, temporary residents who are approved will now have to:

  • compulsorily sell the established property they have bought when they depart Australia; and
  • be required, where undeveloped land has been purchased, to commence construction on that land within 24-months or have the land compulsorily sold.

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The Assistant Treasurer, Senator Nick Sherry, has  announced a major tightening of the foreign investment rules as they relate to residential real estate and a package of tough new civil penalty, compliance, monitoring and enforcement measures.

“The Rudd Government is acting to make sure that investment in Australian real estate by temporary residents and foreign non-residents, is within the law, meets community expectations and doesn’t place pressure on housing availability for Australians,” said the Assistant Treasurer.

“The new provisions announced today will mean that anyone trying to flout Australia’s strict foreign investment rules will face tough new penalties that will be fully enforced.”

Australia’s foreign investment regime relies on a combination of legislation, primarily the Foreign Acquisitions and Takeovers Act 1975(FATA), its related regulations, the Foreign Acquisitions and Takeovers Regulations 1989

(Regulations) and an accompanying Government Policy (Policy). Each of these

is administered by the Foreign Investment Review Board (FIRB).

Today’s announcement includes important amendments to each of the FATA,

the Regulations and the Policy to ensure that foreign non-residents can only

invest in Australian real estate if that investment adds to the housing stock,

and that investments by temporary residents in established properties are

only for their use whilst they live in Australia.

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