Real Estate

Foreign Purchasers : FIRB Approval

Foreign purchasers intending to acquire real estate in Australia must seek prior approval from the Government through the Foreign Investment Review Board (FIRB) unless specifically exempted by the Foreign Acquisitions and Takeovers Regulations. In this page we provide a very short summary of the regulations, specifically as they apply to residential real estate, but you are advised to visit the FIRB site (www.firb.gov.au) and seek professional advice, where appropriate.

All contracts by “foreign persons” to acquire interests in Australian real estate must be made conditional upon foreign investment approval, unless approval was obtained prior to entering into the contract. For properties to be purchased at auction, prior foreign investment approval must still be obtained and advice provided whether the parties were successful or not, and if so, a copy of the signed contract forwarded to the Foreign Investment Review Board (FIRB) after the auction

Who are exempt from seeking approval:

• Acquisitions by Australian citizens – including those resident abroad
  
  
• Acquisition of property zoned residential by foreign nationals who hold permanent resident visas or hold, or who are entitled to hold, a “special category visa”. These includes New Zealand citizens.
  
  
• Foreign persons purchasing property zoned residential, on a joint tenancy basis, with their Australian citizen spouse.
  
  

In what situations are approvals normally granted:

Foreign interests are normally given approval to buy:

• Vacant residential land, including house and land packages where construction has not commenced (on condition that continuous construction of a dwelling is commenced within 12months); and
  
  
• House and land packages where construction has commenced; home units, townhouses, etc ‘Off the Plan’, under construction or newly constructed but never occupied or previously sold. ‘Off the Plan’ sales to foreigners are only permitted for new development projects or extensively refurbished commercial structures, which have been converted to residential, on condition that no more than half the dwellings in a development are sold to foreign interests.

Certain categories of foreign nationals, who will be temporarily resident in Australia continuously for 12months, may be given approval to purchase developed residential real estate for use as their principal place of residence (that is, not for rental purposes) while in Australia. This category includes long-stay retirees and students (although the latter is subject to a purchase value cap). A condition of such purchases is that the residence must be sold when the foreign nationals’ temporary resident visas expire, they leave Australia, or the property is no longer used as their principal place of residence.

All other proposals by foreign interests to acquire developed residential real estate are examinable and are not normally approved, except in the case of foreign companies, with an established substantial business in Australia, buying for named senior executives resident in Australia for periods longer than 12months, provided the accommodation is sold when no longer required for this purpose. Whether a company is eligible, and the number of properties that may be acquired under this category, will depend upon the extent of the foreign company’s operations and, unless there are special circumstances, foreign companies normally will not be permitted to buy more than two houses under this category. Foreign companies would not be eligible under this category where the property represented a significant proportion of its assets in Australia.

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