Navigating Residential Land Acquisition as a Foreign Resident in Australia

Foreign individuals are generally obligated to seek foreign investment approval before acquiring residential land in Australia due to the operation of the Foreign Acquisitions and Takeovers Act 1975 (the Act). Potential foreign purchasers subject to the Act will need to make application to the Foreign Investment Review Board (FIRB) to obtain approval in advance of any acquisition.

Given the complexity of this area of law, seeking the right legal advice is crucial.

Government Policy and Focus of FIRB

The Federal Government’s Foreign Investment Policy (Policy) emphasises a preference for foreign investment in new dwellings rather than established ones. Applications for foreign investment are scrutinised with the overarching principle that the proposed investment should contribute to increasing Australia’s housing stock.

Understanding Significant and Notifiable Actions

According to the Act, if a “foreign person” acquires an interest in Australian land, meeting the monetary test for the land, it qualifies as a “significant action” and a “notifiable action.” This requires notification to the FIRB.

Defining a Foreign Person

The term “foreign person” is a key aspect of Australia’s foreign investment framework. It encompasses individuals not “ordinarily resident” in Australia, corporations with substantial foreign interests, and trustees of trusts with significant foreign involvement.

Residential Land and Its Classifications

The Act defines “residential land” as land with at least one dwelling or the potential for fewer than ten dwellings. Crucial to this definition is the distinction between a “new dwelling” and “vacant land.” A new dwelling refers to one not previously occupied, while vacant land lacks substantive permanent buildings for lawful occupation.

FIRB Application for Residential Land Acquisition

Determining if FIRB approval is required for a residential property acquisition demands careful consideration. Eckermann Lawyers is well-equipped to assist in preparing and lodging FIRB applications, identifying significant and notifiable actions, and advising on potential exemptions or outcomes.

For further assistance or any questions regarding residential land acquisitions and the FIRB processes, please contact the Eckermann Lawyers team at (08) 8366 7900 or via email at enquiries@eckermannlawyers.com.au.