Australia opens its arms when it comes to foreign investment, as it helps to boost the economy. However, if you are a foreign investor (including foreign non-residents and temporary residents) looking to buy a property in Australia, it is essential that you know all the rules associated with buying Australian real estate.
Here are the main rules for foreign investors looking to buy residential property.
1) All foreign non-residents must notify The Foreign Investment Review Board (FIRB) of any proposed purchase of residential real estate.
2) Foreign non-residents or short term visa holders can invest in Australian real estate as long as it adds to the housing stock. This includes:
- New dwellings
- Off the plan properties
- Vacant land for development
3) Cannot buy established dwellings as investment properties or homes, unless they do so with a spouse who is a resident.
- Approval is still required.
4) Need to apply to buy new dwellings in Australia.
- The majority of these proposals are approved without conditions.
5) Need to apply to buy vacant land for residential development.
- These applications are normally approved, but have conditions such as construction must begin within 24 months.
Please note: If the developer has been granted pre-approval to sell new dwellings to foreign buyers, the foreign buyer does not need to submit an approval application.
1) All Temporary Residents must notify FIRB of any proposed acquisition of residential real estate.
2) Can buy one established dwelling which must be used as their Primary Place of Residence (PPOR).
- Need to apply to buy this type of property.
- Must be used as their PPOR in Australia and must be sold when it is no longer their residence.
- It must be sold within three months of leaving Australia.
- Cannot buy established dwellings as investment properties (cannot be rented out).
- Cannot buy established dwellings until they live in Australia.
3) May buy new dwellings.
- This is a dwelling that is purchased directly from the developer.
- This dwelling has not been occupied for more than 12 months in total.
- Need to apply to buy new dwellings in Australia, and applications are normally approved without conditions.
- There are no restrictions on the number of new dwellings that approval can be received for.
4) May buy vacant land to build new dwellings.
- Need to apply to buy vacant land for residential development.
- Applications normally approved subject to conditions, such as construction must begin within 24 months.
- There are no restrictions on the number of vacant properties that approval can be received for.
When you are looking to sell your property, there is normally no requirement to seek approval, unless conditions have not been met. This may include vacant land that was not developed.
For those that no longer wish to purchase the property, it is important to notify the FIRB to let them know you are withdrawing your approval.
Remember, like any large investment it is essential that you do your homework to ensure that this property is the best investment to suit your budget and lifestyle and in the right location.