Investing in the Australian property market from overseas has just become a little more expensive.
The Federal Government has doubled foreign investment application fees, which brings a boost to the government’s coffers, but what does it mean for you?
Firstly, a foreigner can only buy into the Australian property market if their purchase can strengthen and support the country’s economic growth.
This means the government only allows people from overseas to buy new properties and vacant land to develop new properties.
If you live outside Australia, you’ll need to apply for foreign investment approval before purchasing any property here.
A foreign resident is someone who:
- resides in Australia and holds a bridging visa or has applied for a permanent visa; or
- holds a temporary visa and can remain in Australia for a continuous period of more than 12 months.
A foreign non-resident is a person who:
- does not ordinarily reside in Australia (except Australian citizens); or
- holds a visa that permits a stay for only a limited period.
Any foreign residents and non-residents looking to buy a property in Australia, must be approved by the Australian Foreign Investment Review Board. Applications are submitted online and processed by the Australian Taxation Office (ATO).
Foreign non-residents are not allowed to by any established or existing homes in Australia. The Federal Government aims to reserve these homes for Australian citizens, particularly in the wake of the current housing crisis.
You can, as a foreign person, buy a new home in Australia.
A new home is classified as a dwelling that has never previously been sold or occupied before, or if sold by the developer, the dwelling must not have been occupied for more than 12 months.
You can also purchase vacant land, with the condition that the development must be completed within four years from the date of approval and evidence of the completion must be submitted within 30 days.
There are some exemptions to the rules. A foreign person will not have to seek foreign investment approval if they are:
- An Australian/New Zealand citizen
- The holder of an Australian permanent visa; or
- The foreign person is purchasing as joint tenants with their spouse who is an Australian/New Zealand citizen or an Australia permanent resident.
In addition, a foreign person will not need to seek approval if they are purchasing a residential real estate that is:
- an aged care facility, retirement village or certain student accommodation
- acquired by will
- acquired directly from the Commonwealth, a State/Territory or local governing body or
- an interest in certain residential real estate in a Designated Integrated Tourism Resort
If you’re looking to purchase an Australian property while living overseas, you will need to seek legal advice. There are strict penalties in place for any breaches of Australia’s foreign investment framework.
Here at GLG Legal, we can help you navigate the do’s and don’ts of investing in the Australian property market.
Phone our office on: (07) 3161 9555 or email: info@glglegal.com.au to make an appointment with one of our property experts.