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:
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:
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 new 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. Accommodation facilities such as hotels, motels, hostels and guesthouses are treated as 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 by case basis. For further information, click here to view the Foreign Investment Review Board web site.
[i] 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.
[ii] The $300,000 Restriction no longer applies