The information supplied is a general indication only to assist intending buyers and does not apply to a specific transaction.
FURTHER INFORMATION: For a full outline of Australia’s foreign investment policy, including an application form for straightforward residential real estate proposals, as well as other related information, visit the Foreign Investment Review Board website at www.firb.gov.au or phone 02 6263 3795.
Sydney has become a major real estate investment destination. The iconic Harbour Bridge and Opera House, magnificent beaches, quality education and a lifestyle second to none…these are just some of the many attractions that encourage investment from overseas. The lower north shore of Sydney in particular is a magnet. The close proximity to the City, unbeatable Harbour views and quick access to beaches make it a sought-after destination.
If you are an overseas investor then you need to be aware that there are a number of specific legal circumstances that need to be addressed before any purchase is approved by the Australian Government.
Following is a brief outline of the Government’s foreign investment policy in relation to residential real estate acquisitions.
All contracts of sale to acquire residential real estate by foreign interests must be made conditional on foreign investment approval and must allow at least 30 days for a decision to be granted.
The Australian Government’s approach to foreign investment is to encourage investments which are consistent with community interests.
In recognition of the contribution foreign investment has made and continues to make towards the development of Australia, the general policy stance is to welcome foreign investment.
A foreign interest is briefly described as:
Temporary residents are not short-term visitors such as tourists, business people and those here for a medical procedure.
Exemption from examination is given for proposed acquisition of residential real estate in the case of Australian citizens living abroad who are holders of permanent visas or entitled to hold a 'special category' visa.
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.
However, temporary residents can apply to purchase one established dwelling to use as their residence in Australia. Approval is usually provided subject to a condition that the temporary resident sells the dwelling when it ceases to be their residence.
Foreign interests may apply to acquire home units, town houses, house/land packages etc either off the plan, during the construction phase or when the dwelling is newly completed, provided that it has never been occupied or sold and provided no more than 50 per cent of the dwellings in any one development are sold to foreign interests.
However, when the property is to be onsold, it is treated as developed residential real estate and its sale is subject to the restrictions applying to that category of residential real estate.
Developers of more than 10 unit/townhouse projects may apply in advance to sell up to 50 per cent of the residences to foreign investors. Where such approval has been granted, it is not necessary for individual foreign interests to apply for approval.
Situations normally granting approval
You do not need to submit an application for approval to acquire real estate in Australia if:
you are an Australian citizen living abroad;
your spouse is an Australian citizen (not a permanent resident) and you are purchasing residential real estate in both names as joint tenants (not tenants in common);
you are a New Zealand citizen and you are purchasing residential property;
you hold a permanent resident visa and you are purchasing residential property;
you are purchasing new dwelling(s) from the developer, where the developer has pre-approval to sell those dwellings to foreign persons;
you are acquiring an interest in a time share scheme which does not permit you (and any of your associates) more than 4 weeks entitlement per year;
you are purchasing certain residential real estate in an Integrated Tourism Resort (ITR);
you are acquiring an interest in developed commercial property valued below the relevant monetary thresholds;
you are acquiring an interest in developed commercial property where the property is to be used immediately and in its present state for industrial or non residential commercial purposes. The acquisition must be wholly incidental to the purchaser's proposed or existing business activities;
you are acquiring an interest by will or by operation of law (such as, a court order regarding the division of property in a divorce settlement, but not if both parties simply agree to transfer property without a court's intervention); or
you are purchasing property from the Government (Commonwealth, State or Territory, or local).