Foreign Investors - Buying property as a foreigner or Temporary Resident
The Australian Government (based in Canberra, Australia’s capital city)
is aware of the fact that some of Australia’s citizens are cautious
about foreign individuals or companies buying residential real estate
(defined as all Australian real property, including vacant land).
It wants to ensure that the foreign real estate ownership it does allow
is of benefit to the community and in keeping with the community’s
needs. Therefore, the Australian Government insists that all
applications from foreign citizens or companies to buy residential real
estate (either already developed - such as houses and apartments - to be
developed, to be redeveloped or existing only at plan stage) are put
before the Foreign Investment Review Board (FIRB), one of its advisory
This advisory board, which reports to Treasury, looks at all
applications by to purchase residential real estate, no matter what the
value of the intended purchase is, by anyone who is NOT an Australian
citizen, an approved migrant, a permanent resident of Australia, a
foreign national holding a permanent visa or a person who, despite being
a foreign citizen, is entitled to permanent residence status in
Australia, should they take it up, such as a citizen of New Zealand.
These people are holders of "special category visas".
There are many different classes and categories of visas. Click here for
an overview of the various visa classes which can be applied for by
There are usually no problems when the foreign spouse of an Australian
citizen applies to be allowed to purchase property with his/her spouse
on a 50/50 or "Joint Tenant" basis, but there still must be an
application to the FIRB.
How long does an FIRB review take?
Thirty days is needed for an application to be looked at by the FIRB.
There are no "general" approvals available. An approval can only be
granted on a specifically nominated property. Therefore, real estate
contracts with foreign citizens must contain a clause saying that going
ahead with the purchase is conditional upon getting FIRB approval and
that 30 days must be allowed for that approval to be granted or denied.
What influences an FIRB decision?
If the FIRB feels that the residential real estate in question is only
being purchased by a foreign citizen or company just for the purpose of
renting it out, or because the purchaser wants to speculate on the
property’s future value, permission to purchase will be refused.
On the other hand, approval IS usually granted to foreign applicants in
the following circumstances:
A. Where the applicant is residing in Australia on the basis of a
Temporary Entry Visa (with more than 12 months validity) and is wanting
to buy a residence for themselves - as long as the property is sold when
the person no longer lives in Australia Applicants who are entitled to
purchase on these terms include students over 18 studying at a
recognised tertiary institution for more than one year who need
accommodation, but a general limit of $300,000 applies to the value of
any such property acquired by a student temporarily resident in
Australia. Other applicants entitled to purchase are long stay retirees
and people in Australia for work reasons who need accommodation. Again,
any property must be sold when these categories of buyers no longer live
This category does not cover people with visitor or bridging visas.
B. Where a company from a foreign country wants to provide housing for
its senior executives while they are posted to Australia for more than
12 months - again, as long as the property is sold when the employee is
no longer living in Australia. These senior executives have to be
specifically named. Usually, the purchase of two houses per company are
The purchase of another residence, such as a "weekender" for
recreational use, is not approved under any of the above circumstances.
Buying a property from a developer
Apartments or townhouses in a proposed development, or in a development
which has just been completed but has not yet been occupied or sold, can
be sold to foreign investors as long as the developer applies in advance
for this to be allowed. If a foreign citizen buys a property in this way
(often called "buying off the plan"), the property, when built, can be
rented out, sold or used by the purchaser. However, foreign interests
cannot hold more than half the apartments or townhouses in any one
You should ask to see a copy of the developer’s approval letter to
ensure that FIRB approval exists for sales to foreign citizens.
You should be aware that, on purchase of any apartment, new or old, you
are liable to pay regular levies (payable weekly, monthly, quarterly or
annually) to cover the costs of the property and grounds that all the
residents use. A group known as the body corporate, made up usually of
your fellow owners, is responsible for collecting levies for two funds,
called an Administration Fund and a Sinking Fund. These funds go towards
servicing the lifts, repainting the building, lighting the hallways -
the various maintenance jobs that benefit all residents. If you are
buying into an apartment block with, for example, a gym, swimming pool,
rooftop tennis court and so on, levies will be comparatively high.
If you are planning to buy an apartment, your legal representative will
need to make a Strata Records Inspection. This will outline how much the
levies are at the time of purchase. Such an inspection will also tell
you the rules governing use of common facilities, whether or not pets
are permitted as so forth.
Purchasing within a resort
If the Australian Treasurer nominates that a particular resort is an
Integrated Tourism Resort, then both residences and vacant land can be
purchased within that resort by anybody without any FIRB assessment
taking place. The seller of any such property would make this status
known to all prospective purchasers.
To be considered an Integrated Tourism Resort, a place must fulfil
certain conditions, such as covering at least 50 hectares of land within
defined boundaries, have extensive recreational facilities, and so
Commercial real estate
FIRB approval must be sought by any foreign individual or company which
wants to purchase existing commercial and non-residential real estate
valued at $5 million or more. They are normally approved unless
considered "contrary to the national interest".
If the commercial and/or non-residential real estate in question does
not yet exist but is at the development or major redevelopment stage,
permission to purchase is usually given, unless the purchase is
considered "contrary to the national interest".
Construction must start within a specified period of time.
Migrating to Australia?
If you are interested in buying property in Australia because you want
to migrate to Australia on a Permanent Residence Visa (with a view to
taking up Australian citizenship at a later date), it is perhaps
premature to investigate the purchase of property before your
eligibility for a PRV is assessed. PRVs are only granted after
assessment of many factors. Some of these are nomination by an employer,
affiliations with family members already living in Australia and the
business skills you can offer Australia.
Applications to FIRB
Applicants must write to:
The Executive Member
Foreign Investment Review Board
c/- The Treasury
Canberra ACT 2600
and request a Form 3 Notice under Section 26 of the Foreign Acquisitions
and Takeovers Act 1975.
The type of information required by FIRB includes your name, address,
nationality, type of property you are interested in, a copy of the
contract, your passport number and other details relevant to the type of
category of purchase you want to make.
If, for example, you want to buy under one of the temporary resident
categories outlined before, the FIRB will want to see a signed statement
that the residence will not be rented out, and will be sold to
Australian or other eligible purchasers when you leave Australia.
Your legal advisor can let you know exactly what information is required
by FIRB, or you can make a general enquiry by phoning 61 6 263 3795 or
faxing 61 6 263 2940.
If FIRB approval is given for a foreign citizen or company to buy vacant
land, or an existing property which is to be converted into residential
property (eg a former factory or warehouse), the purchasers must start
the building or refurbishing work within a year of receiving approval to
purchase and there would need to be proof that the building/refurbishing
will be of assistance to the community and its housing needs.
Fines on individuals of up to $A50,000 and on companies of up to
$A250,000 can be imposed if there is no notification for prior approval
received by the FIRB and property is nevertheless bought.