Since 2015 with the introduction of Foreign Investment Review Board (FIRB), application fees and a new compliance/penalty regime, the property law regarding the purchase of Australian real estate by a non-Australian resident has become more complex.
Property Law in Australia
The new property law states that a foreign investor should not purchase Australian real estate without legal advice. This is so that the investor remains compliant with regulatory requirements. Non-Australian residents need to apply to the Foreign Investment Review Board (FIRB) for permission in order to purchase residential real estate in Australia. This permission is necessary whether you want to use it as an investment property or live in it.
The FIRB being a part of the federal government is responsible for ensuring most foreign investments in Australia to create new jobs and result in economic growth and preserve the current stock of housing in Australia for local residents to be purchased.
All foreign citizens except New Zealand citizens and Australian permanent residents and their spouses need to apply for approval before taking an interest in any residential real estate as per the property law in Australia.
If you want to purchase a new house or a vacant land, the good news is that most of these applications are approved. FIRB encourages new housing development if only the construction on land is completed within 4 years from the date of purchase.
If you want to buy an existing house, then the bad news is that the non-resident foreign citizens are generally prohibited from buying existing properties in Australia because it deprives local buyers of buying a property they could live in.
Following is a list of several cases in, which there is a chance of getting your application approved to buy an established dwelling:
• If you are a temporary resident in Australia, you can apply to purchase a home to reside for the time you are living in Australia on a condition that you will sell the home once you leave the country. Foreign residents can’t buy a house to rent out.
• Non-Australian residents can get their application approved if you want to buy a house for redevelopment, for example, knock down an old house to build an apartment and to encourage greater housing development.
• A foreign company with a significant local presence in Australia can be allowed to purchase homes to provide housing to their Australian staff. It is not permissible for companies to buy property for investment or renting though.
Need help? Talk to property law experts at Conveyancers Sydney and increase your chances of having your application approved. Call (02) 8084 2764