What Are Your Requirments As A Foreign Purchaser?
Foreign persons generally need to apply and receive foreign investment approval before purchasing vacant residential land for development.
Foreign persons will normally be allowed to purchase vacant land for residential dwelling development, subject to conditions that:
- The development is completed within four years from the date of approval; and
- Evidence of completion of the dwelling/s is submitted within 30 days of being received. This could include a final occupancy or builder’s completion certificate.
Vacant land that previously has an established dwelling on the land would generally not be considered as vacant land for the purposes of Australia’s foreign investment framework.
Established dwellings
Non-resident foreign persons are generally prohibited from purchasing established dwellings in Australia.
An established dwelling is a dwelling (except commercial residential premises such as hotels, motels and caravan parks) on residential land that is not a new dwelling.
Temporary residents will normally be allowed to purchase only one established dwelling to live in as their residence (home) in Australia, subject to the conditions that they:
- Use the property as their principal place of residence in Australia;
- Do not rent any part of the property, included ensuring that the property is vacant at settlement; and
- Sell the property within three months from when it ceases to be their principal place of residence.
Temporary residents are not permitted to purchase established dwellings as investment properties, or rent out, or as holiday homes.
Foreign controlled companies are generally prohibited from purchasing established dwellings, although foreign companies with a substantial Australian business may be permitted to acquire established dwellings for the purpose of providing housing for their Australian based staff.
New dwellings
Foreign persons generally need to apply and receive foreign investment approval before purchasing new dwellings. Applications to purchase new dwellings are usually approved without conditions.
A new dwelling is a dwelling that will be, is being, or has been built on residential land, has not been previously sold as a dwelling and has either:
- Not been previously occupied; or
- If the dwelling is part of a development, was sold by the developer of that development and has not previously been occupied for more than 12 months in total.
New dwellings do not include established residential real estate that has been refurbished or renovated.
A single dwelling that has been built to replace one or more demolished established dwellings would generally not be considered a new dwelling for the purposes of Australia’s foreign investment framework.
Developers
Property developers and other vendors can apply for an exemption certificate to sell new dwellings in a specified development to foreign persons, without each foreign person purchaser being required to seek their own foreign investment approval (similar to what has previously been known as an ‘advanced off-the-plan’ certificate).
Developers (either Australian or foreign) can apply for a new dwelling exemption certificate provided that the development:
- will consist of 50 or more dwellings;
- has development approval from the relevant government authority; and
- if applicable, that foreign investment approval was sought to purchase the land and that any conditions are being met.
Applications for a certificate will be considered on a case-by-case basis to ensure they are not contrary to the national interest.
The certificate, if granted, will normally be approved subject to conditions that the developer:
- provide a copy of the Certificate to each prospective foreign purchaser;
- provide a report (timing defined by the certificate) which includes all of the information requested in the New Dwelling Exemption Certificate Report either:
- by sending to firbresidential@ato.gov.au or
- by emailing firbresidential@ato.gov.au to request secure channel delivery
- ensure that the Development is marketed in Australia.
Failed settlements
A Near-New Dwelling Exemption Certificate has been introduced for failed off-the-plan purchases in a development, which allows for developers to sell near-new dwellings in a similar way to new dwellings.
This fix is necessary because the Foreign Acquisitions and Takeovers Act 1975 defines a new dwelling as a property that has not been previously “sold”. A property is considered “sold” once a binding purchase agreement has been entered into regardless of whether the sale is completed (or settled). If a purchase is not completed the dwelling would no longer be covered by the New Dwelling Exemption Certificate as it is not a new dwelling.
A near-new dwelling is a dwelling in a development that has previously been “sold” although the sale was not completed and the developer is entering a new agreement to sell the dwelling.
A person may apply for a Near-New Dwelling Exemption Certificate if some or all of the dwellings in the development are or may be near-new dwellings.
Please note that this information has been sourced from the http://firb.gov.au/ website.
We recommend you conduct your own research and contact FIRB office if you have any questions