The Australian Government’s foreign investment policy has been developed to encourage investment in Australia and ensure that such investment is consistent with the needs of the Australian community. The Government recognises the important contribution offshore investment makes to the development of Australia’s industry, resources and community.
DEFINITION OF FOREIGN INVESTMENT
A foreign interest is briefly described as:
- A person not ordinarily resident in Australia
- A corporation, business or trust in which a foreigner and any associates have 15% or more ownership or in which several foreigners have 40% or more aggregate of the ownership.
- A Temporary resident ‘ including all foreign nationals living in Australia who;
Holds a valid temporary visa which permits them to stay in Australia for a continuous period of more than 12 months (irrespective of how much time is remaining until that visa expires)
Have submitted an application for permanent rewsidency (PR), and hold a bridging visa which permits them to stay in Australia until their PR application has been finalised.
- Short-term visitors such as tourists, business people and those here for a medical procedure are not temporary residents.
Proposed acquisition of residential real estate is exempt from examination in the case of Australian citizens living abroad who are holders of permanent visas or entitled to hold a ‘special category’ visa. Other situations where approval is normally granted includes;
- Foreign nationals purchasing residential real estate as joint tenant with an Australian spouse.
- Foreign companies purchasing second hand dwellings for the use of their Australian based staff provided that they sell or rent the dwelling if it is expected to remain vacant for more than 6 months. There is no limit to the number of established dwellings which can be purchased, where required for employee accommodation.
- Foreign nationals being Temporary Residents purchasing an established dwelling to be used as their principal place of residence (not for investment purposes); any new dwellings; and single blocks of vacant residential land (other acquisitions of vacant land will require notification and will normally be approved subject to development within 24 months).
- Foreign students resident in Australia are able to purchase an established dwelling as their principal place of residence.
REDEVELOPMENT OF SECOND HAND DWELLINGS
Foreigners may apply to redevelop a second hand dwelling. Development must increase the number of dwellings and no rental income can be obtained from the existing dwelling prior to demolition. Such redevelopments are required to demolish the existing dwelling and commence construction of the dwellings within 24 months in line with vacant land.
Proposed acquisitions of commercial development is normally approved unless it is contrary to the national interest. Accomodation facilities such as hotels, motels, hostels and guesthouses are treated commercial real estate rather than residential real estate. Acquisitions of such facilities – or individual units within them – valued below the relevant developed commercial property threshold are exempt from the FATA and do not require notification and approval. This is determined by the Government on a case to case basis. For further information, click here to view the Foreign Investment Review Board website.