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Foreign Investment Regime

Foreign Investment Regime

FIRB stands for Foreign Investment Review Board, which is an Australian government department that assesses foreigners’ applications to invest properties in Australia.

Under the Australia’s foreign investment regime, all foreign investors are required to obtain FIRB approval before buying a residential property in Australia.

Prior to making an application to FIRB, you will need to confirm whether you are legally defined as a ‘foreigner’. This depends on various factors, including your visa status, where you live, the proportion of your investment, etc.

Once it has been confirmed that you are a foreigner who intends to invest in Australian residential property, you will be subject to the following obligations under the Australian overseas investment regime:

 

01 Application for FIRB approval letter

You must obtain FIRB approval before buying a residential property. You may contact your solicitor to help you complete your FIRB application and pay the relevant application fees.

Before submitting your application, you should confirm the following information:

  • Number and name(s) of applicantsIf more than two people apply together, please determine the method of joint purchase and the proportion of investment by each applicant.
  • Type of property – pre-owned dwelling, new dwelling or vacant land.
  • Value of the property

Note: The application fee must be paid promptly upon submission of the application. The application fee varies according to the value of the property to be purchased. The current application fees for acquiring an interest in residential land are as follows:

Price of the acquisition Fee payable
Less than $75,000 $2,000
$75,000 – $1,000,000 $6,350
$1,000,001 – $2,000,000 $12,700
$2,000,001 – $3,000,000 $25,400
$3,000,001 – $4,000,000 $38,100
$4,000,001 – $5,000,000 $50,800
$5,000,001 – $6,000,000 $63,500
$6,000,001 – $7,000,000 $76,200
$7,000,001 – $8,000,000 $88,900
$8,000,001 – $9,000,000 $101,600
$9,000,001 – $10,000,000 $114,300

It is advised that you carefully check whether the information you fill in is correct before submitting your application. If you find that the information is incorrect after submitting your application, the approval may be delayed and additional fees for variation may be incurred.

 

02 Compliance to FIRB approval conditions

A letter of approval from the FIRB will normally be received within 30 days of submitting the FIRB application. The approval letter will set out the conditions that the applicant must comply with at the time of purchase and after settlement, such as the allowed price of acquisition, whether it is permitted to be leased, the time in which construction must be completed, etc.

If you do not comply with the conditions of the approval, you may be subject to fines, civil penalties or criminal prosecution.

If you need to modify the conditions of approval after the approval is granted, you must apply to the FIRB for a variation before the approval expires. Each variation will incur an additional fee ($12,700 for standard variation and $2,000 for minor variation). Please note that not all variation of conditions will be approved as it will be at the discretion of the relevant department according to the individual circumstances.

 

03 Land and water registration

Subject to FIRB approval conditions, you must register your purchased property on the Australian Taxation Office (ATO) Land and Water Register within 30 days after settlement. You may complete this step by yourself or ask your lawyer to register on your behalf.

Once registered, you will receive an ATO land registration number. Please keep this number safe as you will need it to lodge a vacancy fee return.

Visit the following website to complete registration:

https://www.ato.gov.au/firb_land_registration/

 

04 Submit vacancy fee declaration form

If your purchased land has a residential dwelling, you must lodge an annual vacancy fee return within 30 days after the end of each vacancy year during the term of ownership.

The vacancy year is the 12 months from the date on which you were first entitled to occupy the dwelling (the “occupation day”). If you purchase a pre-owned or new dwelling, your occupation day should be the settlement date. If it is a vacant land with a dwelling yet to be built, the occupation day will be the date of the issuance of the fitness for occupancy certificate after the dwelling has been built on the land.

On the vacancy fee return, you will need to inform the ATO as to how the dwelling has been occupied during the vacancy year. The ATO will assess whether or not you are required to pay any vacancy fee based on your information and advise you how to pay the vacancy fee if required.

As a usual practice, the ATO will send you a reminder via email at the time of registration so that you can file your vacancy fee return in time when it is due. However, please note that you must file a vacancy fee return even if you have not received a notification from the ATO.

To lodge your vacancy fee return please go to https://www.ato.gov.au/FIRBvacancyfee/.

 

05 Personal Information Updates

If there have been any changes to your personal information after registration, please ensure that you notify the ATO so that the relevant authorities can contact you in a timely manner.

There are several ways to update your personal information:

  • Filling in the E-Form – Visit https://www.ato.gov.au/FIRBUpdateEmail/ and complete the FIRB email update form to update your e-mail address.
  • Email notification – You can send an email to [email protected] citing your ATO land registration number and describe the change in your personal circumstances.
  • Contact the ATO by phone: 1800 050 377 (within Australia); +61 2 6216 1111 (outside Australia

Note: Those who are concerned about language communication can contact the ATO through Translating and Interpreting Service: 13 14 50 (Within Australia); +61 3 9268 8332 (outside Australia). Monday to Friday 8:00 am to 6:00 PM Australian Eastern time

 

Disclaimer

Due to frequent changes in the system, it is hereby emphasized that you should not rely solely on this article to make a decision relating to foreign investments. The FIRB approval application fees vary each financial year – please check on the FIRB official website before lodging your application.