A GUIDE TO FOREIGN INVESTING IN BRISBANE, AUSTRALIA
The following is is a brief outline of Australia’s foreign investment policy in relation to residential real estate.
The Foreign Investment Board (FIRB) is responsible for evaluating proposals by foreign interests wishing to make direct investment in Australia. The board makes the recommendations to the Australian Government according to the government's foreign investment policy.
Do I need to get approval to buy real estate in Australia?
If you are not a permanent resident of Australia or an Australian Citizen, and want to buy real estate here, you must get prior approval from the Australian Government.
You do not need prior approval if you:· are an Australian Citizen are an
Why do I need approval?
The Australian Government believes that foreign investment in the housing sector should increase the supply of homes, and should not be speculative in nature. The policy is designed to channel foreign investment into increasing the supply of new housing.
What type if applications are usually approved?
- as long as they start continuous construction within 12 months
Existing residences for redevelopment
- as long as this will increase the supply of housing.
- As well, the house must remain unoccupied during redevelopment.
- includes units, townhouses, and house and land packages.
These types of real estate can be purchased either before construction, during construction, or when the dwelling is newly constructed as long as:
- The dwelling has never been occupied or sold
- No more than 50% of the dwellings in any one development are sold to foreign investors.
Can I buy a pre - owned home?
- As long as you are a Foreign National temporary resident in Australia for more than 12 months who are buying a home. This home must be sold when the residency expires.
- If you are a foreign company buying a home for your senior executives who will be living in Australia for over 12 months.
Can I get in - principal approval?
No, when you apply for foreign investment approval, you must give the address of the property you want to buy.
Can I exchange contracts prior to getting approval?
Yes, as long as the contract is conditional upon obtaining foreign investment approval. If the contract is not conditional, you will be in breach of the act.
Can I get approval after I buy my home?
As long as the contract is conditional on such approval otherwise you cannot receive approval after you have signed a contract on a property.
What if I don't get approval?
If you don’t get the necessary approval beforehand, you may have to cancel the contract or sell your new property, potentially at a significant loss. You could also be fined or imprisoned if you
- Provide false or misleading information
- Don’t comply with a development condition
- Buy a property after your application has been rejected
- Didn’t apply for approval and your purchase was inconsistent with Australia’s foreign investment policy.
How do I get approval?
You must apply in writing for approval and fill in the appropriate form and forward this to the FIRB (Foreign Investment Review Board). Forms are found at http://www.firb.gov.au/
How do I lodge an Application?
Proposals may be lodged by facsimile with the original being submitted by mail.
The Executive Member
Foreign Investment Advisory Board C/o
CANBERRA ACT 2600
Fax: +61 2 6263 2940
How long does it take?
A decision is usually made within 30 days of lodgement
FREQUENTLY ASKED QUESTIONS TO PURCHASING REAL ESTATE IN AUSTRALIA
Q1. I am a foreign person. Can I invest in Australia?
Yes. However, whether or not you require foreign investment approval depends on what you wish to invest in. Except in rare circumstances, acquisitions of residential real estate require prior foreign investment approval before the purchase can proceed. Certain acquisitions of commercial real estate also require prior foreign investment approval. Acquisitions of shares or other assets of businesses also require prior foreign investment approval in certain instances based on the size and type of investment.
Q2. What forms do I have to fill out?
It depends on what you want to buy. The R3 Form (for use by individuals) and C1 Form (for use by companies and trusts) are available for straight forward residential real estate applications. The D2 Form is used by developers wanting advanced approval to sell up to 50 per cent of a new residential development to foreign persons.
Q3. How long do applications normally take?
FIRB have a requirement to make a decision within 30 days of receiving a statutory notice with another 10 days in which to advise the parties of the decision. That time period may be extended by a further 90 days if necessary.
Questions by Category:
Q4. I am a foreign person living in Australia on a long stay, temporary resident visa. Do I need approval to buy an established house to live in?
Yes. Foreign persons temporarily resident in Australia for a period exceeding 12 months from the time of application for approval are eligible under foreign investment policy to acquire residential real estate. If the property being purchased is an established dwelling, that is, one that has been previously occupied or sold, foreign investment approval is still available provided that the dwelling is to be used as the person's principal place of residence, not for rental purposes and the property must be sold when their visa expires or they cease to reside in Australia.
Q5. Can I exchange contracts prior to getting approval?
Yes. You can enter into contracts for the purchase of property as long as those contracts are conditional upon obtaining foreign investment approval. If the contract is not conditional, you will be in breach of the Act. This condition is necessary to protect you (and your deposit) should approval not be given. If you sign a contract without such a condition, you will be committing a breach of the Act and may be subject to forced sale of the property.
Q6. My husband and I are here on long stay business visas and already own a home purchased with Government approval - Can we get approval to buy another house this time for investment purposes?
Yes. Provided it is not a second-hand residential property. You would normally be granted approval to purchase a brand new home or a unit that has not been previously sold or occupied and is part of a development where not more than 50 per cent of the dwellings are already sold to foreign interests. Approval could also be expected for the purchase vacant land on the basis that you agree in writing to build a house on the site within 12 months.
Q7. I am a Temporary Resident whose visa expires shortly and I am leaving Australia. Can I keep the home I have lived in for the past 3 years and rent it out?
Unless the property you acquired was vacant land, which has subsequently been developed, or a brand new property, no. You must notify the Government and/or make arrangements to sell your property as soon as possible. If you fail to do so, you risk possible prosecution and your details will be forwarded to the Department of Immigration and Multicultural and Indigenous Affairs which could affect the success of any subsequent applications to obtain visas to visit or reside in this country.
Q8. We currently own an established house (originally second-hand) with your approval but wish to move to an established residence elsewhere. Is such a "swap" possible and do we have to sell first?
Yes, it is possible, but your application will be looked at to determine whether you have genuine reasons for moving and that the "swap" is not being used as a mechanism to circumvent policy restrictions. We would expect you to undertake to sell your present home as soon as possible (generally within 3 months). This only applies to the acquisition of a second established residence and applicants must still meet the Government's foreign investment requirements for the acquisition of such properties, i.e. the property must be used as your principal place of residence, not for rental purposes and must be sold to Australian or other eligible purchasers when you no longer reside in the property or your visas expire. It should be noted that approvals for such swaps are not likely to be granted more than once.
Q9. My wife and I are British citizens and we often visit family here. We want to retire next year and live in Australia. Do we need to get FIRB approval to buy a house now? What if we buy jointly with our son and daughter-in-law who are Australians?
Yes. All foreign nationals, unless they have permanent resident status or meet another exemption, need to seek prior FIRB approval before buying a house. Approval will depend on what your current visa status is and the nature of the house you wish to buy. The fact that you may buy jointly with family members does not affect how your proposal will be viewed under policy.
Q10. I am a foreign national and was recently told that I would not need approval if I bought real estate through an Australian incorporated company or unit trust. Is this true?
Q11. I am an Australian citizen living overseas, do I require permission to purchase a house?
No. Australian citizens are exempt from notification unless they are purchasing through a foreign incorporated company.
Q12. I am an Australian permanent resident, do I require approval to purchase a house?
Generally no. Australian permanent residents are exempt from notification, unless they are purchasing through a foreign incorporated company or foreign registered trust. Further, in order to meet the exemption, the property must be zoned as residential property by the local council.
Q13. I am an Australian citizen in a same-sex relationship with a foreign person. Does my partner require foreign investment approval if we want to purchase a house together as joint tenants?
The exemption for foreign persons purchasing residential real estate as joint tenants with their Australian citizen spouse does not extend to same sex couples. Foreign persons in a defacto same-sex relationship must seek foreign investment approval for the acquisition of any residential real estate or vacant land.
Q14. I am an Australian citizen but my fiancé is a foreign person and is currently residing overseas. However, we are getting married in few months and we want to buy a property together now. Is that possible?
This depends on the circumstance. If sufficient confirmation that the marriage is to take place in the near future (i.e., within a few months) can be provided to the Foreign Investment Review Board, it is likely than an application can be approved. The foreign person should still submit an application and provide supporting documentation to show that the wedding is to take place, i.e. confirmation of church/celebrant bookings etc.
Q15. I'm a foreign person living in Australia. My sister is an Australian citizen/permanent resident. If we're buying a house together, do I require approval?
Even though your sister (or any other Australian citizen/permanent resident who may be on the contract) doesn't require approval, you are still required to seek foreign investment approval and submit an application for a decision.
Q16. I am an Australian citizen, but my spouse / de facto partner is a foreign person, do we require permission to purchase a house?
Australian citizens and their foreign spouses (which include de facto partners) are exempt from notification as long as the property is zoned residential and you are buying the property as joint tenants.
Q17. I am a New Zealand citizen, do I need permission to purchase residential property?
No. A New Zealand citizen is exempt from notification. However, a New Zealand permanent resident does require approval if they want to purchase real estate in Australia.
Q18. What if I'm a New Zealand citizen purchasing with my foreign spouse?
A noted above, New Zealand citizens are exempt. However, their spouses do not qualify for this exemption and would require approval the same as any other foreign person.
Q19. The property I wish to buy is coming up for auction next Saturday. Do I need prior approval to bid at the auction?
The nature of auction sales is that bids are made without conditions. If you make a bid and have not previously obtained FIRB approval, then you will already have broken the law. Moreover, the vendor may enforce the contract and depending on whether the purchase accords with Government policy, you may be subject to legal action. It is in your own best interests to get prior approval from the Government. Whilst no guarantees can be given, every effort is made to process your request in time for the auction date. Obviously, the more notice the better.
Q20. I want to purchase a house at auction, but I can't make the contract conditional, what should I do?
If you submit your application before the auction and give a reasonable time (approximately 5 working days before the auction), the FIRB will try to ensure that you have the decision before the auction.
Q21. If I buy my property through an Australian company or trust arrangement, does that need approval?
Yes. If you are a foreign person you require approval regardless of the way you buy the property.
Q22. I am a student at university and want to buy an established house to live in while at university. Is that allowed?
Yes, but for purchases of established residential real estate there is a $300,000 limit for the acquisition by students. Additionally, students need to be over 18 years of age, be studying at a recognised tertiary institution and hold a student visa valid for at least the next 12 months. Students need to provide a letter from their tertiary institution confirming the course they are attending and the duration of that course. The property also needs to be close to the tertiary institution.
The property would be subject to the normal conditions that are placed on second hand properties, namely that the purchaser must live in the property, they cannot rent or lease out the property and they must sell the property if their visas expire, they leave Australia or cease to live in the property.
Should foreign students wish to acquire vacant land for development or brand-new properties, no thresholds apply. However foreign investment approval still needs to be obtained. Acquisitions of vacant land would be conditional on ongoing development commencing on the property within 12 months. Acquisitions of brand-new properties will be subject to the property having never been previously occupied or sold.
Q23. I am a student and have approval from you to own and live in a house for as long as I remain a temporary resident. Can I rent out a room to another student?
No. Approval to purchase the property was granted explicitly on condition that it was your principal place of residence and that no rental/lease income is to be derived from it.
Q24. I bought vacant land last year with FIRB approval but am unable to start construction on my property by the commencement date - who should I contact?
You or your representative should notify the FIRB as soon as possible with an explanation of your circumstances and request a formal extension of time before the original timeframe expires. The matter will be looked at on a case by case basis. Extensions may be given where good cause is shown.
Q25. Due to unforeseen circumstances, we are unable to build the house on the land we bought last year. How will the Government view us selling without undertaking development?
The Government is most concerned about foreign interests acquiring residential real estate in Australia without complying with the development conditions. You must contact the FIRB to explain your circumstances. Your claims will be considered and a decision given to you on what action you should take. A proactive approach where you initiate contact early is viewed more favourably than through normal routine follow-up activities where we discover conditions have not been met.
Q26. If we cannot comply with or do not comply with conditions and I am told to sell the property by FIRB, can I sell it to anyone?
No. Sales of properties owned by foreign citizens when directed by FIRB will only be allowed to Australian citizens who are not associated with the foreign person. Generally, such sales are to be made irrespective of price (even if a capital loss is realised) and within a required timeframe. Any such sale will be need to be approved prior to settlement.
Q27. Can a breach of the Foreign Acquisitions and Takeovers Act 1975 (FATA) get me into trouble with any other Government agency?
Yes. Breaches of the FATA are treated seriously and other Government Agencies may be advised of such breaches (including the Department of Immigration and Multicultural and Indigenous Affairs, the Australian Federal Police and the Australian Taxation Office). This may result in delays in visas being issued, further character assessment and an assessment of any tax payable.
Q28. Our company purchased a house with your approval which we intend to demolish and build three units on the land. However, we have experienced a delay in the planning process and wondered whether the property can be occupied before demolition begins?
No. The conditions of your approval state clearly that the property must remain vacant until demolition begins.
Q29. I inadvertently bought some land about 6 months ago to build a house and recently a friend told me that I should have obtained FIRB approval. What action will the Government take against me now?
Action will depend on whether your acquisition would have been approvable under the current guidelines. Worst case scenario - where it is considered inconsistent with policy you may be ordered to sell the land within a certain time. Provided you sell within the required time, prosecution is unlikely though details of the breach will be sent to the immigration authorities for any action they deem necessary.
Q30. Do I still have to build on vacant land I acquired with foreign investment approval now that my visa status has changed and I have become an Australian permanent resident?
Yes. Your obligation to improve the vacant land to a value of at least 50 per cent of the purchase price of the land or market value does not change. If you are having problems meeting this requirement you should contact the FIRB.
Q31. I am a US Citizen. Do I require foreign investment approval to buy residential real estate in Australia?
Yes. While the AUSFTA will liberalise United States sourced investment, the Government's foreign investment policy in relation to the acquisition of property remains unchanged. Foreign persons, including Unites States citizens require foreign investment approval to acquire any residential real estate in Australia. Application forms and policy information are available from www.firb.gov.au
Q32. I am a US Citizen, can I buy commercial property?
Yes. The acquisition of developed commercial property that does not comprise an accommodation facility, residential component or vacant land, and is valued at less than $871 million is exempt from notification for US investors (from 1 January 2007).
Q33. Under the AUSFTA, what is a "US investor"?
A US investor is a "US national" or a "US enterprise".
A US national is a national of the United States of America, as defined in Title III of the Immigration and Nationality Act of the United States of America; or a permanent resident of the United States of America.
A US enterprise is an entity constituted or organised under a law of the United States. The form in which the entity may be constituted or organised may be, but is not limited to a corporation, a trust, a partnership, a sole proprietorship, and a joint venture.
A branch (of an entity that is not itself a US enterprise) is a US enterprise if the branch is located in the United States of America; and is carrying on business activities in the United States of America in a way other than being solely a representative office; and in a way other than being engaged solely in agency activities, including the sale of goods or services that cannot reasonably be regarded as undertaken in the United States of America; and by having its administration in the United States of America.