Real Estate Purchase in Queensland? Does FIRB apply to you?
The Foreign Investment Review Board (FIRB) is the entity which oversees real estate and business investments in Australia by foreign persons.
Section 5 of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (Act) defines a foreign person as a natural person who is not ordinarily a resident in Australia. The Act provides further definitions for corporations and trustees who may also be classified as a foreign person.
Foreign persons who are looking to purchase residential real estate in Australia need to obtain the approval of FIRB before entering into a Contract of Sale.
If approval has not already been granted, a condition should be inserted into the Contract of Sale allowing the buyer to terminate if FIRB approval is not obtained before settlement.
FIRB will generally approve a foreign person’s acquisition of one established dwelling on the following conditions:
a) the property is vacant at settlement;
b) the property is used as a principal place of residence;
c) no part of the property is rented; and
d) the property is sold when it ceases to be a principal place of residence.
There are, however, exceptions to the rule. A few of these include:
1. if you are purchasing the property as joint tenants with your spouse, who is an Australia resident;
2. if you are purchasing off a developer who has approval to sell to foreign persons; or
3. you have acquired the property as the beneficiary of a Will.
Foreign Investment is a complex and sometimes confusing area of law. Failure to comply can result in significant adverse consequences. If you are a foreign person looking to purchase real estate or other business investments in Australia, we recommend contacting one of our friendly staff for legal advice.
For further information regarding FIRB and real estate purchases by foreign persons, please also visit: www.firb.gov.au