The Foreign Investment Review Board (FIRB) is an Australian Government board that reviews applications made by foreign persons or entities interested in purchasing a property in Australia.
There are different applications for foreign investment approval, depending on the type of property being purchased. In this article, we explore the compliance requirements surrounding residential land.
Who needs FIRB approval?
If you are a foreign investor interested in investing in Australian property, you may need to apply for foreign investment approval.
You are considered a foreign investor if you are:
- A person not ordinarily resident in Australia (for example, not an Australian permanent resident or an Australian citizen); or
- A foreign corporation or a corporation where an individual who is not ordinarily a resident in Australia holds a substantial interest in the corporation
What is an Exemption Certificate?
An exemption certificate is an upfront FIRB approval to purchase one property or vacant land in a specific state or territory within Australia.
It allows a foreign person to make multiple attempts to acquire one property or vacant land for residential investment. Generally, an exemption certificate is valid for 12 months from the approval date.
An exemption certificate will generally be subject to conditions. For example, the certificate may limit the value of the property you are allowed to purchase.
Type of Properties
As a foreign investor you are limited to purchasing the following types of properties:
- Vacant residential land; or
- New residential property
If you’re a foreign citizen living overseas, you may purchase an existing property in Australia provided you hold a valid Australian visa.
Vacant Residential Land
An exemption certificate allows you to purchase vacant land for development. Construction of all dwellings must be completed within four years of the FIRB approval date.
New (or near-new) Dwelling Exemption Certificate
A new dwelling means residential property that will be or is being, or has been built and has not been previously sold or occupied.
For example, an off-the-plan development where any building works have not started or have not yet finished. If building works have finished, but no one has occupied the property for more than 12 months, the property will be considered a near-new dwelling.
If a property developer has already obtained an exemption certificate for the property you are interested in, you may be exempted from obtaining your individual FIRB approval.