Choose an agent that understands how to handle transactions with overseas buyers

At IICON, we understand the rules around foreign investment in property and you can rest assured when buying or selling with us.

Attached below are the rules regarding foreign investment in Australian property published by the “Foreign Investment Review Board”.

Foreign Investment Rules

Foreign persons should notify the Government and get prior approval to acquire an interest in certain types of Real Estate. An ‘interest’ includes buying Real Estate but can also include obtaining or agreeing to enter into a lease, or financing or profit sharing arrangements.

Real Estate covers acquisitions of the following types of properties in Australia:

Residential Real Estate

Residential Real Estate means all land and housing that can be used for residential purposes. It does not include commercial real estate or rural land.

For residential properties valued at $1 million or less, foreign investors will pay a fee of $5,000. Higher fees will apply to more expensive residential properties as well as business, agriculture and commercial real estate applications.

Temporary residents can buy one established dwelling only to live in (see below) and they may buy new dwellings, or vacant land to build new dwellings, because these latter purchases increase the available housing stock in Australia.

Established (Second-Hand) Dwellings

Temporary residents need to apply if they wish to buy an established dwelling. Temporary residents may acquire one established dwelling only and it must be used as their residence (home) in Australia. Such proposals normally meet with no foreign investment objections subject to conditions (such as, that the temporary resident sells the property when it ceases to be their residence).

Temporary residents are not permitted to buy established dwellings as investment properties.

New Dwellings

A ‘new dwelling’ is a dwelling which is being purchased directly from the developer and has not been previously occupied for more than 12 months in total.

Temporary residents need to apply to buy new dwellings in Australia. Such proposals are normally approved without conditions.

Vacant Land

Temporary residents need to apply to buy vacant land for residential development. These applications are normally approved subject to conditions (such as, that ongoing construction begins within 24 months).

Commercial

There are two broad categories of Commercial real estate:

Developed commercial real estate generally includes offices, factories, warehouses, hotels, restaurants and retail outlets. It does not include rural land, but may include rural property which does not fall within the definition of rural land (that is, it is not used wholly and exclusively for carrying on a substantial business of primary production).

Foreign persons need to notify if they want to take an interest in developed commercial real estate that is valued at $54 million or more – unless the real estate is heritage listed, then a $5 million threshold applies. An exception for developed commercial real estate applies to New Zealand investors and United States investors, where a $1,078 million threshold applies instead.

Developed commercial property also includes hotels, motels, hostels and guesthouses, as well as individual dwellings that are a part of these properties. Buying a unit in a hotel that is owner‑occupied or rented out privately (that is, it is not part of the hotel business) is considered to be residential property.

Land for commercial development is vacant land for commercial development.

Foreign persons need to apply to buy or take an interest in land for commercial development (including to start a forestry business), regardless of the value of the land. Such proposals are normally approved subject to development conditions.

All acquisitions of commercial real estate by foreign government investors are notifiable.

How to Apply

Applicants that are required to notify an acquisition should complete Form 3 – Notice under section 26A and submit to: firbrealestateapplications@treasury.gov.au

Frequently Asked Questions

1. According to the list of exemptions, I don’t need approval – should I contact you to confirm that the exemption applies to my particular circumstances?

   No. If in doubt, seek legal advice.

2. According to the list of exemptions, I don’t need approval – can you provide written confirmation of this for my bank/mortgage provider?

   No, we do not provide individual exemption letters.

3. I am a foreign non-resident and am interested in buying a property from the Defence Housing Australia (DHA). Would I need an approval for this acquisition?

   You do not require approval to acquire property from Defence Housing Australia as you are purchasing the property from the Government.

4. Do I need approval if I have inherited the property which someone left me in their will?

   No. You do not need approval for any acquisitions which you either inherited or obtained through an Australian court ruling.

5. I am in a same-sex de facto relationship with an Australian citizen. Am I exempt if we purchase residential property together as joint tenants?

   Yes.

6. We are a married couple who have emigrated to Australia and now live permanently in Australia. While I have Australian citizenship, my wife has an Australian visa which entitles her to remain in Australia until her permanent residence application is decided. Does my wife require approval to purchase an established (second hand) dwelling?

   You do not need to submit an application (exempt) for approval to acquire real estate in Australia if a spouse is an Australian citizen and are purchasing residential real estate in both names as joint tenants (not tenants in common)

7. I am an Australian citizen currently residing overseas and my de facto is a foreign citizen. We will buy a residential property in joint names. Do we need approval?

   No, provided you and your partner buy the property as joint tenants.

8. I am an Australian citizen and my de facto partner is a temporary resident. As we are not married, does my partner need to obtain approval?

   No, provided you and your partner buy the property as joint tenants.

The information above is only to be used as a guide and all readers should seek independent legal advice. For more information on Foreign Investment rules in real estate, please visit http://www.firb.gov.au.