Foreign persons purchasing residential real estate lawyer in Australia (2024)

The provisions of the Foreign Acquisitions and Takeovers Act 1975 (Commonwealth) (“Act”) and Foreign Acquisitions and Takeovers Regulation 2015 (Commonwealth) (“Regulation”) apply strict rules to foreign persons purchasing residential real estate Brisbane or investing in property in Australia.

A summary of some of the key issues follows.

Residential Real Estate Generally

Under Australia’s foreign investment framework, foreign persons generally need to apply for foreign investment approval before purchasing residential real estate in Brisbane, Australia.

The Government’s policy is to channel foreign investment into new dwellings as this creates additional jobs in the construction industry and helps support economic growth. Foreign investment applications are therefore generally considered in light of the overarching principle that the proposed investment should increase Australia’s housing stock (be creating at least one new additional dwelling).

Consistent with this aim, different factors apply depending on whether the type of property being acquired will increase the housing stock or whether it is an established dwelling.

It is important that foreign investors understand and comply with Australia’s foreign investment framework as strict criminal and civil penalties may apply for breaches of the law, including disposal orders.

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, including 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.

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.

Vacant Land

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.
• 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.

Applications

All foreign investment applications for residential real estate are usually submitted online and are processed by the Australian Taxation Office. A competentreal estate lawyer in Australia will provide this information.

Exemptions

Foreign persons, regardless of citizenship or residency, do not require foreign investment approval to acquire an interest in a residential real estate Brisbane in Australia that is a new or near-new dwelling purchased from a developer that holds a new or near-new dwelling exemption certificate that allows the developer to sell dwellings in the specified development to foreign persons.

Fees

The Foreign Acquisitions and Takeovers Fees Imposition Act 2015 (FeesAct) and Foreign Acquisitions and Takeovers Fees Imposition Regulation 2015 (FeesRegulation) set the fees for foreign investment applications and notices made under the Act and Regulation.

When does a fee apply and when is it paid?

Foreign persons are required to pay a fee for each application made, or notice given, under the Act and the Regulation

The fees that are payable for residential land applications depend on the price for the acquisition of the interest.

A single fee applies for foreign persons purchasing residential land as joint tenants.

How is the fee paid?

Fees for residential real estate applications are payable when the application is lodged. Information on how to pay the fee will be provided as part of the application process.

Fee Schedule

Penalties

Strict penalties (including civil and criminal penalties and disposal orders) may apply for breaches of Australia’s foreign investment rules.

Conclusion

The above is only a quick general summary of some key issues (source – Australian Government – Foreign Investment Review Board website at http://firb.gov.au/).

If you require any further information or assistance in making an application, please do not hesitate to contact the property law team at Aylward Game Solicitors. And Mark Game is a solicitor with strong experience and background to help foreign persons purchasing residential real estate Brisbane and is a well-established real estate lawyer in Australia.