Second–Hand (Established) Dwellings

This category includes all residential dwellings which are not new dwellings (that is, they have been previously owned and/or they have been occupied for more than 12 months).

Acquisitions by individual(s)

Foreign persons are prohibited from acquiring established dwellings for investment purposes (that is, they cannot be purchased to be used as a rental or holiday property), irrespective of whether they are temporary residents in Australia or not.

Foreign persons who are temporary residents in Australia do not require approval to acquire a second-hand dwelling as their principal place of residence.

Acquisitions by companies

Proposals by foreign-owned companies to acquire second-hand dwellings for the purpose of providing housing for their Australian-based staff are normally approved subject to the following condition:

             the company undertakes to sell or rent the property if it is expected to remain vacant for six months or more.

Vacant Land

Proposed acquisitions of vacant land for residential development are normally approved subject to development condition(s) imposed under the FATA.

Acquisitions of single blocks of vacant land (that is, land which is zoned to permit the construction of no more than one residential dwelling per block of land) for the purpose of building a single residential dwelling on each block are normally approved subject to the following condition:

       continuous substantial construction must commence within 24 months.

Acquisitions of other vacant land (not single blocks) for the purpose of building multiple residential dwellings are normally approved subject to the following conditions:

            continuous substantial construction must commence within 24 months; and

           at least 50 per cent of the acquisition cost or the current market value of the land (whichever is higher) must be spent on development. 

Once these conditions have been fulfilled, properties acquired under this category may be rented out, sold to Australian interests or other eligible purchasers, or retained for the foreign investor's own use.

New Dwellings

New dwellings acquired ‘off the plan’ (before construction commences or during the construction phase) or after construction is complete are normally approved where the dwellings:

       have not previously been sold (that is, they are purchased from the developer); and

       have not been occupied for more than 12 months.

There are no restrictions on the number of such dwellings in a new development which may be sold to foreign persons, provided that the developer markets the dwellings locally as well as overseas (that is, the dwellings cannot be marketed exclusively overseas).

This category includes dwellings that are part of extensively refurbished buildings where the building's use has undergone a change from non-residential (for example, office or warehouse) to residential. It does not include established residential real estate that has been refurbished or renovated.

A property purchased under this category may be rented out, sold to Australian interests or other eligible purchasers, or retained for the foreign investor's own use. Once the property has been purchased, it is second-hand real estate and is subject to the restrictions applying to that category.

Advanced Off The Plan Approval For Developers

Developers of 10 or more dwellings may have previously applied for advance approval to sell up to 50 per cent of new residences to foreign interests. If such pre-approval was granted, the developer is required to provide a copy of their pre-approval letter to each prospective purchaser and to report all sales (that is, Australian and foreign) to FIRB on a 12 monthly basis until all the dwellings in the development have been sold or occupied.

As the administrative procedures are streamlined, the current system for developers seeking advance approval to sell new dwellings to foreign persons will be discontinued. Until further notice, the pre-approval arrangements that have been operating for some time will continue to operate on a case-by-case basis.  Please contact FIRB for specific advice.

All current pre‑approvals remain valid. Where such approval has been granted, foreign purchasers should not apply for individual approval. If the developer has not been granted advance approval, then the individual investor must seek approval.

FROM 31 MARCH 2009 THE REGULATIONS CHANGED AS FOLLOWS:

Temporary residents’ exemption

Temporary residents are no longer required to notify proposed acquisitions of:

       an established dwelling for their own residence (not for investment purposes);

       any new dwellings; and

       single blocks of vacant residential land (other acquisitions of vacant land will require notification and will normally be approved subject to development within 24 months).

The exemption applies to contracts entered on or after 18 December 2008 (the date that the Assistant Treasurer announced the policy changes) - that is, notification is not required even if a temporary resident signed/exchanged contracts to purchase such property before the Regulations were amended on 31 March.

The exemption includes acquisitions of property by temporary residents via their trust or Australian incorporated company.

The existing notification requirements continue to apply to non-residents, who must notify all proposed acquisitions of residential real estate.

Accommodation facilities

Accommodation facilities such as hotels, motels, hostels and guesthouses are treated as commercial real estate rather than residential real estate. Acquisitions of such facilities – or individual units within them – valued below the relevant developed commercial property threshold are exempt from the FATA and do not require notification and approval.  See Accommodation Facilities for further details.

Streamlined administrative procedures

Streamlined administrative procedures have been established for non-resident foreign persons, foreign-owned companies and trust estates to notify and receive approval for proposed acquisitions of residential real estate which meet the eligibility criteria. New application forms and statutory notices have been introduced to facilitate the streamlined procedures. See How to apply for further details.

The Foreign Investment Online Application System (FIOLA) is no longer available. Applicants must download and print the new application forms, then email or fax the completed and signed forms to FIRB - please note that applications submitted on the old forms from 31 March 2009 will not be valid. In the coming months, we expect to further streamline the process to allow for electronic lodgement of applications.

As the administrative procedures are streamlined, the current system for developers seeking advance approval to sell new dwellings to foreign persons will be discontinued. Until further notice, the pre-approval arrangements that have been operating for some time will continue to operate on a case-by-case basis.  Please contact FIRB for specific advice.