Foreign Investors

There’s one very good reason why investors hear so much about Australia being one of the world’s prime locations for property investment: It’s true.

People love living here. They enjoy the sun, sea, surf, friendly culture and the opportunity. It’s that simple. Australia is one of the most liveable countries in the world and with every international visitor who falls in love with Australia, and decides to stay, your investment property value increases. Likewise, with every local who buys their own little piece of the country that will always be home, your investment property value increases.

Government policy on foreign investment

When foreign investment is consistent with local community needs, the Australian government actively encourages it. Specifically, it likes to see property investment that will increase the supply of residences – investment that’s not purely speculative. The Australian government wants to increase the supply of new housing, house-and-land developments, home units and townhouses, in order to benefit the local building industry and consequently, the Australian economy.

You don’t need government approval to invest in Australia if you’re:

• An Australian citizen, residing in Australia or abroad.
• A holder of an Australian permanent resident visa.
• Entitled to hold a special category visa (e.g. a New Zealand citizen).
• The spouse of an Australian citizen, and you’re purchasing residential real estate in joint names as joint tenants.

Who DOES need government approval?

If you’re a foreign interest , you’ll need government approval for the following sorts of investments in Australia:

• Purchasing residential real estate (including established or new residential property, vacant land and hobby farms);
• Purchasing developed commercial real estate;
• Purchasing rural land;
• Purchasing vacant commercial real estate for development;
• Applying for designation as an Integrated Tourism Resort or Strata Titled Hotel.

A ‘foreign interest’ is defined as:

• A natural person not ordinarily resident in Australia;
• A corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a controlling interest;
• A corporation in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate controlling interest;
• The trustee of a trust estate in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or
• The trustee of a trust estate in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.

What type of property can you buy?

If you’re a foreign investor, you can buy the following sorts of property (subject to government approval):

• Vacant land – So long as you start construction within 12 months of Foreign Investment Review Board (FIRB) approval.
• Second-hand dwelling – If you’re a temporary resident with a 12+ month visa or you’ll be making the dwelling your principal place of residence.
• New dwelling in a development (e.g. townhouse or unit) – If no more than half of the dwellings in the development are owned by foreign interests
• New standalone dwelling (e.g. house) – If you have another dwelling that is similar in construction and proximity.
• Any of the above – If you’re a foreign national, temporarily resident in Australia for more than 12 months, you’re buying the property to use as your principal place of residence, and you’ll be selling it when you cease to reside in Australia.
• Commercial property - Purchase of commercial property is normally approved unless it’s contrary to the national interest. This is determined by the Government, on a case-by-case basis.
• Company executive residence – If you’re a foreign company buying a residence in Australia for one of your senior executives.

Visit the Foreign Investment Review Board website for more information.