Changes to Foreign Investment in the Australian Property Market

The Federal Government has doubled foreign investment application fees, making it more expensive for overseas investors to enter the Australian property market. But what does this mean for you?

Who Can Buy Property in Australia as a Foreigner?

Foreign investment in Australian property is restricted to ensure that the market supports economic growth. Foreign investors are typically only allowed to purchase:

1. New properties or vacant land for developing new properties.
2. Foreign residents: Individuals residing in Australia on a bridging visa, applying for a permanent visa, or holding a temporary visa for more than 12 months.
3. Foreign non-residents: Individuals who do not ordinarily reside in Australia (except Australian citizens) or hold a visa for a limited period.

Foreign Investment Approval Process

Before purchasing property, foreign residents and non-residents must seek approval from the Australian Foreign Investment Review Board (FIRB). Applications are submitted online and processed by the Australian Taxation Office (ATO).

What Can Foreign Investors Buy?

• New homes: A dwelling that has never been sold or occupied, or a dwelling that has been sold by the developer and not occupied for more than 12 months.
• Vacant land: With the condition that development must be completed within four years of approval, and evidence of completion must be submitted within 30 days.

What Foreign Investors Cannot Buy

Foreign non-residents are not allowed to purchase established homes in Australia. The government is aiming to reserve these homes for Australian citizens, particularly amid the housing crisis.

Exemptions to Foreign Investment Rules

Certain exemptions apply, including:

• Australian/New Zealand citizens or holders of Australian permanent visas do not need approval.
• Foreign persons purchasing property with a spouse who is an Australian/New Zealand citizen or a permanent resident do not need approval.
• Certain residential properties, including aged care facilities, retirement villages, and certain student accommodation, do not require foreign investment approval.
• Residential real estate purchased through inheritance or directly from the Commonwealth, State/Territory, or local governing bodies may be exempt.

Potential Penalties

There are strict penalties for breaching Australia’s foreign investment framework, so it's crucial to understand the rules and seek proper legal advice.

Need Legal Advice?

If you are looking to invest in the Australian property market from overseas, GLG Legal can guide you through the application process and the specific rules you need to follow.

📞 Phone: (07) 3161 9555
📧 Email: info@glglegal.com.au