Investing in Australia
The Australian Government
controls the acquisition of Australian properties and businesses by foreign
investors through the Foreign Investment Review Board (FIRB). If foreign
interests own or control 15% or more of an Australian company, it may
be treated as a foreign company by the FIRB. In addition to this, Australia's various state governments have controls and rules in relation to foreign investment. Foreign investors which do
not comply with Australian Federal and State Government rules may be subject to penalties such as
- cancellation of
contracts and/or forced sale of Australian property;
- 2 years imprisonment
or a fine of $50,000 (foreign persons);
- a fine of AU$250,000.00
(foreign companies).
Australian law requires
certain contracts involving foreign persons to be subject to FIRB approval.
For this reason it is very important to seek legal advice before signing
a contract. Following is a summary of the rules most commonly encountered
(naturally this summary is general in nature and should not be relied
upon instead of specific legal advice).
- Existing
residential properties may not be purchased by a foreign
person unless a proposal for substantial redevelopment or improvement
of the property is undertaken. FIRB approval is required.
- New
residential properties which have never been sold by the
builder and have never been lived in may be sold to foreign persons
if certain conditions are met. Builders and developers may only sell
half of the dwellings they construct to foreign people. FIRB approval
is required.
- Off-the-Plan
units
may be sold to a foreign person where the developer has pre-approval
to do so (up to 50% of such a development may be sold to foreign persons).
Normally the developer gains written approval from the FIRB in advance.
- Businesses/Commercial
property valued at less than AUD50 million may normally be
sold to foreign persons without approval (much larger investments are acceptable where USA investors are concerned). Businesses or Commercial property
valued in excess of the approved amount requires FIRB approval. However, special
rules apply in many industries including banking, natural resources,
media, aviation, telecommunications and others. Seek legal advice before
signing a contract.
- Vacant
land may be purchased by a foreign investor who undertakes
to commence construction of a building on the land within twelve months
of acquisition. FIRB approval is required.
- Rural
land is subject to FIRB scrutiny and approval. There is a polciy document devoted entirely the rural land rules
Special rules apply
to permanent and temporary visa holders:
- Permanent
Residence visa holders
may acquire any property or business interest in Australia without FIRB
approval.
- Temporary
Residence visa holders
may only purchase properties and businesses in Australia subject to
the above FIRB rules. However, we can seek special approval from the
FIRB for a person on a temporary residence visa to buy one residential
property which will be their private residence during the term of their
visa.
- A foreign person
married to an Australian is normally permitted to acquire property jointly
with their spouse. Seek legal advice before signing a contract.
The Australian Government
has issued many complex guidelines relating to foreign investment in Australia
in addition to those explained above. We urge foreign investors to seek
legal advice before entering a contract to buy Australian property or
business.
Email
us for more
information.
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