Purchasing residential property in Australia as a foreign person
For an Australian citizen or permanent resident, purchasing property in Australia is usually a relatively smooth process if you have a good lawyer to assist you. If you are not an Australian citizen or permanent resident, however, the process can be less straightforward.
Under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”), a foreign person must apply for FIRB (Foreign Investment Review Board) approval to purchase a residential property in Australia.
Who is a foreign person?
If you are not an Australian citizen or permanent resident, you may fall within the definition of a “foreign person” under the FATA. A New Zealand citizen living outside of Australia is also a foreign person.
When purchasing a residential property using a company or trust, the purchasing entity may still be regarded as a foreign person. For example, a corporation is “foreign” if a foreign individual, company or government holds at least 20% of its shares individually, or 40% in aggregate with other foreign shareholders.
I’m a temporary resident in Australia. Can I buy a house to live in?
If you hold a visa with a duration of more than 12 months, technically you can (subject to approval). However, you must apply for FIRB approval before signing the purchase contract, or after signing a contract that is conditional upon FIRB approval being obtained. FIRB approval for temporary residents will be subject to conditions such as requiring the property to be sold before departing Australia. Therefore, you should carefully consider the remaining term of your current visa before deciding to purchase property as a temporary resident.
I’m a foreign person buying a house with my spouse who is an Australian citizen. Should I apply for FIRB approval?
If you are purchasing a residential property with an Australian Citizen as joint tenants (not as tenants in common), you do not need to apply.
As a foreign person, what happens if I purchase property without applying for FIRB approval?
Depending on the circumstances, failing to apply for FIRB approval may constitute a criminal offence or be subject to a civil penalty.
In our future updates, we will cover other foreign acquirer issues including extra duty and land tax considerations.
For further advice, please contact us to assist you.
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