If you are an overseas investor then you will 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.

At Doyle Spillane we are happy to discuss any of your real estate interests and needs to help you navigate your journey, as well as providing you with relevant and up to date information about the market and information on specific properties that suit your requirements.

Australian Government’s Foreign Investment Policy

This has been developed to encourage investment in Australia.  It also oversees the investment with regards to consistency within the needs of the Australian community.

A foreign interest is briefly described as:

1. A person not ordinarily a resident in Australia
2. 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.
3. Temporary residents, including all foreign nationals living in Australia who; 
4. Hold a valid temporary visa permitting them to stay in Australia for a continuous period of more than 12 months (regardless of how much time is remaining until that visa expires);
   or
5. Have submitted an application for permanent residency (PR), and in the meantime hold a bridging visa permitting them to stay in Australia until their PR application has been finalised.

Temporary residents are not short-term visitors such as tourists, business people and those here for a medical procedure.   

Residential  

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.  

Situations normally granting approval

1. Foreign nationals purchasing residential real estate as joint tenant with an Australian spouse.
2. 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.
3. Foreign nationals being Temporary Residents [*] purchasing:
4. Any new dwellings;
5. An established dwelling to be used as their principal place of residence (not for investment  purposes); and
6. Single blocks of vacant residential land.  (Note:  other acquisitions of vacant land require notification and will normally be approved subject to development within 24 months). 
7. Foreign students resident in Australia are able to purchase an established dwelling as their principal place of residence. [**]

Second hand dwelling redevelopment
Foreigners may apply to redevelop a second hand dwelling, although such development must increase the number of dwellings.  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 new dwellings within 24 months, as with purchase of vacant land.    

Commercial  
Unless deemed contrary to the national interest, proposed acquisitions of commercial development are normally approved.  Accommodation facilities such as hotels, motels, hostels and guesthouses are treated as commercial 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 by case basis.  

For further information, click here to view the Foreign Investment Review Board web site.

(Link: http://www.firb.gov.au/content/default.asp)

[*] The exemption for ‘temporary residents ‘applies to contracts entered on or after 18 December 2008 (the date that the Assistant Treasurer announced the policy changes) - that is, notification is not required even if a temporary resident signed/exchanged contracts to purchase such property before the Regulations were amended on 31 March.

The exemption includes acquisitions of property by temporary residents via their trust or Australian incorporated company.  The existing notification requirements continue to apply to non-residents, who must notify all proposed acquisitions of residential real estate.

[**] The $300,000 Restriction no longer applies